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HomeMy WebLinkAboutPR 23011: ESTABLISHING A NEIGHBORHOOD EMPOWERMENT ZONE Em City of % in orl rthu — TN1uS 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 04/17/2023 PDL PAGE 1 OF 18 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. P.R.NO.23011 04/17/2023 PDL PAGE 2 OF 18 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 04/17/2023 PDL 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 P.R.NO.23011 04/17/2023 PDL PAGE 4 OF 18 P.R. NO.23011 04/17/2023 PDL PAGE 5 OF 18 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 P.R.NO.23011 04/17/2023 PDL PAGE 6 OF 18 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. P.R.NO.23011 04/17/2023 PDL PAGE 7 OF 18 P.R.NO.23011 04/17/2023 PDL PAGE 8 OF 18 Fnrrp City of Cir) LIO d rt rth u�~ 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. P.R. NO.23011 04/17/2023 PDL PAGE 9 OF 18 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. 3/19/2019 2 P.R. NO.23011 04/17/2023 PDL PAGE 10 OF 18 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. 3/19/2019 3 lu.23011 04/17/2023 PDL PAGE 11 OF 18 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. 3/19/2019 4 P.R. NO.23011 04/17/2023 PDL PAGE 12 OF 18 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. 5 3,+?, 9,2.011 23 PDL PAGE 13 OF 18 $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. 3/19/2019 6 P.R.NO.23011 04/17/2023 PDL PAGE 14 OF 18 P.R. NO.23011 04/17/2023 PDL P""='3OF18 f � v �a r r fi t. } ! T arAcademy Ofr ,-i' s-`1 '�.,, - eF t * i` 5�0. .,,,,,..x.,,,s,,,,,,,::::`Ae e=lerated Studs _ ^,tt+ � 't' 4 IMOK* y,�r .fir_ ., Greaterdo ! ; �• � itlic7 .c'r... ,1. *r% '' : `r-+. 2ap[i54C.hurch Fas Christian ' > I� a '�' �' ��• Scott Park t. • ,g +' , e '''Faith Mssnry ` F ': t,,. ��t >a 4's _Ay Qs . . Bapa hurch a Museum of aR' -44 `. Books-FAT+1,Nashi�ng°to ,•' • _.,..i`a °i � S 4 ,, the'rGui/Co- adr i - 4 4 l- *" , Elemntary/SSc'hool ra �`•' ` + a a + Bacnes � .., fI .' a, ` " ,� �' y',.,�ltal. a } f'. ` by t '.t "st 'y° y`-' .,,/ -, 1 ` i. . _ '' ♦ •' 'e.Department. 1. Mt Sinai Ba ti5[Ch�l.h / P-rtri,,h/ur,Cit / .�' P P f`o Rhe�.,:i Word MinistnP, ±f� x f 1l♦C , �..i/ 5 e- - a e*ro�srH � . '-�#, 5s New St Jonn �" ,a. h,# Rock Island ;0 ,� h,y d' ' , „ 8 -Baptist Chuch, - Q Port of Port tb f" "r , r_ ..e' <' or at rp1 N. Carter chapel �, r?.' �`.. `^°' / '+ ♦ r; , �rf .I c.ME C�hu•rch lt� !� = 4�• Lincoln Mi dle�chool pe ' Pit orlPort ,/' , f'..%).�.* Arthur Te tli l.'e. J,r.�' . ` Soc,,ed Hear(, r 7 ? a if „S Pc tArthur `� .CaathoecChurrh i '� / / A tc tatt,ve Center s,;, f +]` J !4ty F a �� ms:: Y e. Sh re t'ust ,xtet�� +.4, r((/ s chuch i fr{ l 'Baptst r t�.,pi ., fir • ' ` t�"Si'''. ',f+Y:41., 1'' yr 7s Jared N logdn Park is' -,.. - -- .. , ..›,1,,e, , -,,,,. _ / . ... ..„. .., ,,,, _ 4•• • / . s i r s pi,/ ,r f .;i` apt �tr �s; i j J' , �e�~ S f t� • r, l' 1 • ate$ > , # ; ,le ate a. r.. + may . 4. '• 1�,- �.idet r .. ' P.R.NO.23011 04/17/2023 PDL PAGE 16 OF 18 Exhibit P.R.NO.23011 04/17/2023 PM_ PAGE 17 OF 18 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 P.R.Na 23011 04/17/2023 PDL PAGE 18 OF 18 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 .