HomeMy WebLinkAboutPR 23011: ESTABLISHING A NEIGHBORHOOD EMPOWERMENT ZONE Em
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www.PortArthurTx.gov
DEPARTMENT OF DEVELOPMENT SERVICES
DIVISION OF PLANNING AND ZONING
INTEROFFICE MEMORANDUM
Date: April 17, 2023
u. The Honorable Mayor and City Council
Through: Ronald "Ron" Burton, City Manager
From: Pamela D. Langford, Assists t City Manager— Operations/Director of
Development Services Pett,,
RE: P.R. NO. 23011 —A resolution establishing a Neighborhood
Empowerment Zone
Introduction:
The Port Arthur City Council is being asked to approve Proposed Resolution No. 23011,
establishing a portion of the Historic Westside as Neighborhood Empowerment Zone
#9. Exhibit "C" is attached to the proposed resolution detailing the boundary for the
proposed zone.
Background:
It is necessary to create the Neighborhood Empowerment Zone to promote:
• an increase in economic development in the zone.
• That the creation of the zone benefits and is for the purpose of increasing the
public health, safety, and welfare of the persons in the municipality.
• That the creation of the zone satisfies the requirements of Section 312.202,
Tax Code in that it will likely contribute to the retention or expansion of primary
employment or 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.
The Neighborhood Empowerment Zone provides the authority for a municipality to enter
into an agreement with a business for a period not exceeding ten (10) years.
"Remember,we are here to serve the Citizens of Port Arthur"
P.O.Box 1089 X Port Arthur,Texas 77641-1089 X 409.983.8101 X FAX 409.982.6743
Budget Impact:
The creation of the zone itself has no effect. Any agreement committing incentives to a
potential business or project would have to be acted on individually by the City Council
of the City of Port Arthur.
Recommendation:
recommended that City Council approve Proposed Resolution No. 23011,
establishing a portion of the Historic Westside as Neighborhood Empowerment Zone
#9. Exhibit "C" is attached to the proposed resolution detailing the boundary for the
proposed zone.
"Remember, we are here to serve the Citizens of Port Arthur"
P.O.Box 1089 X Port Arthur,Texas 77641-1089 X 409.983.8101 X FAX 409.982.6743
P.R.NO.23011
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RESOLUTION NO.
A RESOLUTION ESTABLISHING NEIGHBORHOOD
EMPOWERMENT ZONE #9, ALSO REFERRED TO AS THE
WESTSIDE EMPOWERMENT ZONE, PURSUANT TO THE
TEXAS NEIGHBORHOOD EMPOWERMENT ZONE ACT
(TEXAS LOCAL GOVERNMENT CODE, CHAPTER 378).
WHEREAS, the City is authorized under Texas Local Government Code, Chapter
378 to create a Neighborhood Empowerment Zone if the City determines that the zone
would promote: (1) the creation of affordable housing, including manufactured housing,
in the zone; (2) an increase in economic development in the zone; (3) an increase in the
quality of social services, education, or public safety provided to residents of the zone; or
(4) the rehabilitation of affordable housing in the zone (Exhibit "A"); and,
WHEREAS, pursuant to Resolution No. 19-106, the City Council of the City of Port
Arthur adopted the Neighborhood Empowerment Zone (NEZ) Tax Abatement and Basic
Incentive Policy for the City of Port Arthur, as delineated in Exhibit "B", and will exercise
certain municipal powers in such; and,
WHEREAS, to further this purpose, it is in the best interest of the city to designate
a portion of the historic Westside, as delineated in Exhibit "C", as Neighborhood
Empowerment Zones #9 pursuant to the Texas Local Government Code, Chapter 378;
and,
WHEREAS, the City Council finds and determines that the creation of the zone
satisfies the requirements of the Texas Redevelopment and Tax Abatement Act,
specifically Tax Code Section 312.202, as delineated in Exhibit "D"; now, therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUR:
SECTION 1. That the facts and opinions in the preamble are true and correct.
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SECTION 2. That the City Council of the City of Port Arthur does hereby find and
make determinations as follows:
a) That the creation of the zone would promote an increase in economic
development in the zone.
b) That the creation of the zone benefits and is for the purpose of increasing the
public health, safety, and welfare of the persons in the municipality.
c) That the creation of the zone satisfies the requirements of Section 312.202,
Tax Code in that it will likely contribute to the retention or expansion of primary
employment or 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.
SECTION 3. That the City Council hereby designates the area set forth in Exhibit
"A", attached hereto and incorporated herein for all purposes, as a Neighborhood
Empowerment Zone.
SECTION 4. That the boundaries of the Westside Empowerment Zone shall be as
shown in Exhibit "C".
SECTION 5. That a copy of the caption of this Resolution be spread upon the
Minutes of the City Council.
READ, ADOPTED, AND APPROVED on this day of April, A.D., 2023, at
a Regular Meeting of the City Council of the City of Port Arthur, Texas, by the following
vote: AYES:
Mayor
City Council
D R N( 23011
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PAGE 3 OF 18
Noes
Thurman Bill Bartle, Mayor
ATTEST:
Sherri Bellard, TRMC, City Secretary
APPROVED AS TO FORM:
0
V ecia4' izeno, City torney
APPROVED FOR ADMINISTRATION:iRon Id""Ron" Burto City Man e
/4- ttyi y 102
Pamela D. Langford, Assistant ity Manager— Operations/
Director of Development Services
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P.R. NO.23011
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4/17/23.1:07 PM LOCAL GOVERNMENT CODE CHAPTER 378.NEIGHBORHOOD EMPOWERMENT ZONE
LOCAL GOVERNMENT CODE
TITLE 12. PLANNING AND DEVELOPMENT
SUBTITLE A. MUNICIPAL PLANNING AND DEVELOPMENT
CHAPTER 378. NEIGHBORHOOD EMPOWERMENT ZONE
Sec. 378.001. DEFINITION. In this chapter, "zone" means a neighborhood empowerment zone
created by a municipality under this chapter.
Added by Acts 1999, 76th Leg., ch. 305, Sec. 1, eff. May 29, 1999.
Sec. 378.002. CREATION OF ZONE. A municipality may create a neighborhood empowerment
zone covering a part of the municipality if the municipality determines the creation of the
zone would promote:
(1) the creation of affordable housing, including manufactured housing, in the zone;
(2) an increase in economic development in the zone;
(3) an increase in the quality of social services, education, or public safety
proviued to residents of the zone; or
(4) the rehabilitation of affordable housing in the zone.
Added by Acts 1999, 76th Leg., ch. 305, Sec. 1, eff. May 29, 1999.
Sec. 378.003. ADOPTION OF ZONE. (a) A municipality may create a zone if the governing
body of the municipality adopts a resolution containing:
(1) the determination described by Section 378.002;
(2) a description of the boundaries of the zone;
(3) a finding by the governing body that the creation of the zone benefits and is
for the public purpose of increasing the public health, safety, and welfare of the persons in
the municipality; and
(4) a finding by the governing body that the creation of the zone satisfies the
requirements of Section 312.202, Tax Code.
(b) A municipality may create more than one zone and may include an area in more than
one zone.
Added by Acts 1999, 76th Leg., ch. 305, Sec. 1, eff. May 29, 1999.
Sec. 378.004. MUNICIPAL POWERS. In addition to other powers that a municipality may
exercise, a municipality may:
(1) waive or adopt fees related to the construction of buildings in the zone,
including fees related to the inspection of buildings and impact fees;
(2) enter into agreements, for a period of not more than 10 years, for the purpose
of benefiting the zone, for refunds of municipal sales tax on sales made in the zone;
(3) enter into agreements abating municipal property taxes on property in the zone
subject to the duration limits of Section 312.204, Tax Code; and
(4) set baseline performance standards, such as the Energy Star Program as developed
by the Department of Energy, to encourage the use of alternative building materials that
address concerns relating to the environment or to the building costs, maintenance, or energy
consumption.
https://statutes.capitol.texas.gov/Docs/LG/htm/LG.378.htm 1/2
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4/17/23,1:07 PM LOCAL GOVERNMENT CODE CHAPTER 378.NEIGHBORHOOD EMPOWERMENT ZONE
f Acts 1999, 76th Leg., ch. 305, Sec. 1, eff. May 29, 1999. Amended by Acts 2001, 77th
Leg., ch. 1263, Sec. 5, eff. Sept. 1, 2001.
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Fnrrp
City of Cir)
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Texas
Neighborhood Empowerment Zone (NEZ) Program
Tax Abatement & Incentive Policy
GENERAL PURPOSE AND OBJECTIVES
Chapter 378 of the Texas Local Government Code allows a municipality to create a
Neighborhood Empowerment Zone (NEZ) when a "...municipality determines that the
creation of the zone would promote:
1. the creation of affordable housing, including manufactured housing, in the zone;
--in increase in economic development in the zone;
J. an increase in the quality of social services, education, or public safety provided to
residents of the zone; or
4. the rehabilitation of affordable housing in the zone."
It is the City of Port Arthur's goal to promote development within its Neighborhood
Empowerment Zones in an effort to improve the local economy and enhance the quality
of life for its citizens. Insofar as these goals are served by enhancing the value of the
local tax base and increasing economic opportunities, the City of Port Arthur will give
consideration to providing the following incentives for development within Neighborhood
Empowerment Zones.
As ' dated by state law, the property tax abatement under this policy applies to the
owners of real property. Nothing in the policy shall be constructed as an obligation by the
City of Port Arthur to approve any tax abatement application.
f DEFINITIONS —A. Abatement or Tax Abatement: full or partial exemption for ad valorem taxes of
eligible properties in a reinvestment zone designated as such for economic
development purposes.
B. Agreement: a contractual agreement between a property owner and a taxing
jurisdiction for the purpose of a tax abatement.
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C. Base Year Value: the assessed value of either the applicant's real property and
improvements located in a designated reinvestment zone on January 1 of the year
prior to the execution of the agreement plus the agreed upon value of any property
improvements made after January 1 of that year but before the execution of the
agreement, and/or the assessed value of any tangible personal property located
on the owner's real property on January 1 of the year prior to the abatement period
covered by the agreement.
D. Capital Investment only Real Property Improvements such as new facilities and
structures, site improvements, facility expansion, and facility modernization.
Capital Investment does NOT include land acquisition costs and/or any existing
improvements, or personal property (such as machinery, equipment, and/or
supplies and inventory).
E. Eligible Rehabilitation: only physical improvements to Real Property
Improvements. Eligible Rehabilitation does not include personal property(such as
furniture, appliances, equipment, and/or supplies).
F. Facility: property improvements completed or in the process of construction which
together comprise an integral whole.
G. Gross Floor Area: measured by taking the outside dimensions of the building at
each floor level, except that portion of the basement used only for utilities or
storage, and any areas within the building used for off-street parking.
H. Incremental Value: the amount of assessed value of the project that is in addition
to the Base Year Value of applicant's real property at their prior location.
I Neighborhood Empowerment Zone: an area so designated for the purpose of
providing economic incentives, including a tax abatement, as authorized by the
City of Port Arthur in accordance with Texas Local Government Code Annotated
Section 378 as amended.
J. New Construction: a newly constructed habitable structure improvement
requiring a permanent foundation. This excluded accessory structures such as
sheds and incidental out buildings.
K. Primary Residence: the residence that has a Homestead Exemption on file with
Jefferson County Appraisal District.
L. Real Property: land defined by legal description owned by the person applying for
a tax abatement, including any improvements thereto, which is to be improved and
valued for property tax purposes, and which is to be included in the Neighborhood
Empowerment Zone.
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investment Zone: an area designated as such by the City of Port Arthur in
accordance with the Property Redevelopment and Tax Abatement Act codified in
Chapter 312 of the Texas Tax Code, or an area designated as an enterprise zone
pursuant to the Texas Enterprise Zone Act, codified in Chapter 2303 of the Texas
Government Code.
N. Substantial Investment: a project deemed as an eligible facility under this policy,
that exceeds $5,000,000 in capital investment.
[PROGRAM POLICY
It is`thepolicy of the City of Port Arthur that consideration will be provided in accordance
witn the guidelines, criteria and procedures outlined in this document. This policy applies
to the owners of real property. Project consideration will include the potential impact of
the reinvestment project on the immediate and surrounding area.
A. Authorized Facility: Neighborhood Empowerment Zone Incentives may be granted
within a Neighborhood Empowerment Zone for new construction or renovation of
single-family uses for investments of $50,000 or greater and may be granted for
all other uses for investment of$75,000 or greater.
B. Eligible Property: Neighborhood Empowerment Zone Incentives may be granted
for new construction or renovation of owner-occupied single-family homes, office,
pail, hotel and meeting facilities, restaurant and multi-family residential facilities
within a Neighborhood Empowerment Zone, designated by the City Council of the
City of Port Arthur, Texas.
Ineligible Facilities or Projects:
A. No incentives shall be granted for development resulting from the relocation of
an eligible facility from one area of the city to within the Neighborhood
Empowerment Zone, excepting projects considered "Substantial Investments,"
as defined herein.
Procedural Guidelines:
;son, partnership, organization, corporation or other entity desiring that the City of
Port Arthur consider providing Neighborhood Empowerment Zone incentives shall be
required to comply with the following procedural guidelines. No representations made
herein considered binding unless and until approved by the City Port Arthur City Council.
Preliminary Application:
Applicants shall submit a completed "Application for Neighborhood Empowerment Zone
Development Incentives" form for consideration of Incentives to the Department of
Development Services of the City of Port Arthur, 444 4th Street, Port Arthur, Texas 77640.
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Consideration of the Application:
A. The City Manager will consider requests for incentives in accordance with these
policies, pursuant to Chapter 378 of the Texas Local Government Code. Additional
information may be requested as needed.
B. The City Council may authorize an agreement that outlines the terms and
;onditions between the City and the applicant and governs the provision of the
incentives.
Inspection of the Project:
During the term of such agreement, the City of Port Arthur will have the right to inspect
the project facility during regular business hours to ensure compliance with the agreement
and accuracy of the owner certification.
Recapture:
If a project is not completed as specified, or if the terms of the incentive agreement are
oft. rf; the City has the right to cancel or amend the incentive agreement and all
previously waived fees and abated taxes shall become due to the City and liens may be
attached.
Effect of Sale, assignment or lease of property:
No incentive right may be sold or assigned without the approval of the City Council. Any
sale, assignment or lease of the property may result in execution of the recapture
provision, as outlined above.
TYPE OF INCENTIVES AVAILABLE ---
Building Permit Fee Waivers
The Building Construction Permit Fee Waiver Program affords property owners an
exemption from planning and building fees associated with new construction or
renovation and occupancy of eligible facilities within the target area.
Expedited Permit Reviews
In order to facilitate redevelopment within the Neighborhood Empowerment Zones, the
Department of Development Services is committed to assisting applicants through the
planning and permit review process as quickly as possible.
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Lien Waivers
in oraer to render properties with Neighborhood Empowerment Zones more marketable,
the Lien Waiver Program affords property owners a release of liens attached to properties
as the result of demolitions or expenditures associated with cutting high grass. Release
of such liens would only be allowed in conjunction with new construction or renovation of
eligible facilities within the target area.
Construction Tax Abatement
The Construction Tax Abatement Program is an economic development tool designed to
provide incentives for the new construction or renovation of single-family homes, office,
retail, restaurant and multi-family residential facilities within a Neighborhood
_'n.powerment Zone. The Construction Tax Abatement Program is intended to contribute
to area development by attracting additional capital and human investment to the area as
well as additional residents to support economic development activities within the area.
Value of Abatements: authorized facilities may be granted a municipal tax abatement on
all or a portion of the increased taxable value of eligible property over the base year value
for a period not to exceed three (3) years, except as outlined below.
TAX ABATEMENT PROGRAM GUIDELINES
The eligibility requirements are as follows:
Investment Municipal Tax Abatement I Schedule
$50,000 & up for residential uses 100%; or 100% of the incremental
and value for Substantial Investments 1st Year
$75,000 & up for all other uses relocating to the City.
$50,000 & up for residential uses 100%; or 100% of the incremental
and value for Substantial Investments 2nd Year
$75,000 & up for all other uses relocating to the City.
$50,000 & up for residential uses 100%; or 100% of the incremental
and value for Substantial Investments 3rd Year
!75,O0o & up for all other uses relocating to the City.
$250,000 or more for any eligible 100% for new investments and the
use incremental value for Substantial 4th Year
Investments relocating to the City.
$500,000 or more for any eligible 100% for new investments and the
use incremental value for Substantial 5th Year
Investments relocating to the City.
$750,000 or more for any eligible 100% for new investments and the
use incremental value for Substantial 6th Year
Investments relocating to the City.
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$1,000,000 or more for any eligible 100% for new investments and the
use incremental value for Substantial 7th Year
Investments relocating to the City.
$1,500,000 or more for any eligible 100% for new investments and the
incremental value for Substantial 8th Year
use Investments relocating to the City.
" nnn n00 or more for any eligible 100% for new investments and the
incremental value for Substantial 9th Year
"`" Investments relocating to the City.
$5,000,000 or more for any eligible 100% for new investments and the
incremental value for Substantial 10th Year
use Investments relocating to the City.
Abatement Program Considerations:
A. The final valuation determined by the Jefferson County Appraisal District will be
used to determine the actual yearly tax abatement exemption.
,13:.W ,hP.tax abatement shall be granted only to the owner of the property.
C. No tax abatement exemption shall be effective until the applicant has met all of the
eligibility requirements contained in the guidelines and policies, state law, and City
of Port Arthur codes.
D. There shall be no retroactive tax abatement exemptions — all tax abatement
exemptions become effective only on or after the date the City Council approves
the tax abatement agreement.
E. The applicant shall agree to hold the City of Port Arthur, its agents, employees and
public officials harmless and pay all attorneys' fees that are generated by any
•.-_;pute regarding the tax abatement agreement.
F. Personal and or real property identified before the period covered by the
abatement agreement will not be eligible for abatement.
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Exhibit
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Sec. 312 . 202 . CRITERIA FOR REINVESTMENT ZONE. (a) To be
designated as a reinvestment zone under this subchapter, an area
must:
(1) substantially arrest or impair the sound growth
of the municipality creating the zone, retard the provision of
housing accommodations, or constitute an economic or social
liability and be a menace to the public health, safety, morals,
or welfare in its present condition and use because of the
Ntesence of:
(A) a substantial number of substandard, slum,
deteriorated, or deteriorating structures;
(B) the predominance of defective or inadequate
sidewalks or streets;
(C) faulty size, adequacy, accessibility, or
usefulness of lots;
(D) unsanitary or unsafe conditions;
(E) the deterioration of site or other
:improvements;
(F) tax or special assessment delinquency
exceeding the fair value of the land;
(G) defective or unusual conditions of title;
(H) conditions that endanger life or property by
fire or other cause; or
(I) any combination of these factors;
(2) be predominantly open and, because of obsolete
platting, deterioration of structures or site improvements, or
other factors, substantially impair or arrest the sound growth
of the municipality;
(3) be in a federally assisted new community located
in a home-rule municipality or in an area immediately adjacent
to a federally assisted new community located in a home-rule
municipality;
(4) be located entirely in an area that meets the
requirements for federal assistance under Section 119 of the
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Housing and Community Development Act of 1974 (42 U. S . C. Section
5318) ;
(5) encompass signs, billboards, or other outdoor
advertising structures designated by the governing body of the
municipality for relocation, reconstruction, or removal for the
purpose of enhancing the physical environment of the
municipality, which the legislature declares to be a public
purpose; or
(6) be reasonably likely as a result of the
designation 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 municipality.
(b) For purposes of this section, a federally assisted new
community is a federally assisted area:
(1) that has received or will receive assistance in
the form of loan guarantees under Title X of the National
Housing Act (12 U. S . C. Section 1749aa et seq. ) ; and
(2) a portion of which has received grants under
Section 107 of the Housing and Community Development Act of 1974
(42 U. S . C. Section 5307) made pursuant to the authority created
by'-that section for grants in behalf of new communities assisted
under Title VII of the Housing and Urban Development Act of 1970
or Title IV of the Housing and Urban Development Act of 1968 or
in behalf of new community projects assisted under Title X of
the National Housing Act (12 U. S.C. Section 1749aa et seq. ) .
Added by Acts 1987, 70th Leg. , ch. 191, Sec. 1, eff. Sept . 1,
1987 . Amended by Acts 1989, 71st Leg. , ch. 2, Sec. 14 . 09 (a) ,
eff. Aug. 28, 1989; Acts 1989, 71st Leg. , ch. 1106, Sec. 29,
eff,Aug. 28, 1989 .