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RES 2005-20TOWN OF TROPHY CLUB, TEXAS RESOLUTION NO. 2005-20 A RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF TROPHY CLUB, TEXAS APPROVING GUIDELINES AND CRITERIA FOR TAX ABATEMENTS ENTITLED "TOWN OF TROPHY CLUB, TEXAS POLICY STATEMENT FOR TAX ABATEMENT" AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the Town of Trophy Club is a Home Rule municipality incorporated under the Constitution and the laws of the State of Texas; and WHEREAS, Chapter 312 of the Texas Tax Code authorizes a governmental entity to provide for tax abatements pursuant to properly adopted guidelines and criteria governing tax abatement agreements; and WHEREAS, the Town Council having previously adopted Resolution No. 2005- 13 expressing its intent to become eligible to participate in tax abatements; and WHEREAS, the Town Council desires to stimulate continued economic growth in the Town of Trophy Club, while preserving the values and existing assets that provide the quality of life our residents have come to enjoy; and WHEREAS, the Town Council desires to put in place a Tax Abatement Policy that will allow the Town to be competitive in attracting economic growth and be of benefit to all the residents of the Town; WHEREAS, the Town acknowledges that both the retention of economic assets and existing jobs and the creation of new jobs and economic endeavors have an important place in striking a positive economic balance in the Town; and WHEREAS, the Town Council has reviewed the proposed Guidelines and Criteria for Tax Abatements entitled "Town of Trophy Club, Texas Policy Statement for Tax Abatement", a copy of which is attached and incorporated into this Resolution as Exhibit "A", and WHEREAS, the Town Council finds that the proposed Exhibit "A" setting forth the guidelines and criteria for tax abatements serves the goal of furthering economic development while preserving the existing assets of the Town; NOW, THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN OF TROPHY CLUB, TEXAS: RES 2005-XX Section I. That the foregoing recitals stated in the preamble are found to be true and correct and are deemed incorporated into the body of this Resolution as if copied herein in their entirety. Section 2. That proposed Guidelines and Criteria for Tax Abatements entitled "Town of Trophy Club, Texas Policy Statement for Tax Abatement", Exhibit "A", is determined to be sound and beneficial to the Town of Trophy Club and is hereby approved and adopted in its entirety. Section 3. That this Resolution shall become effective from and after its date of passage in accordance with law. PASSED AND APPROVED by the Town Council of the Town of Trophy Club, Texas on this the lSt day of August, 2005. Mayor Town of Trophy Club, Texas [SEAL] ATTEST: Town of Trophy Club, Texas APPROVED TO AS FORM: Town of Trophy Club, Texas RES 2005-XX EXHIBIT "A" TOWN OF TROPHY CLUB, TEXAS POLICY STATEMENT FOR TAX ABATEMENT I. General Purpose and Objectives The Town of Trophy Club is committed to the promotion and retention of high quality development in all parts of the Town and to an ongoing improvement in the quality of life for its citizens. To the extent that these objectives are generally served by the enhancement and expansion of the local economy, the Town of Trophy Club will, on a case-by-case basis, give consideration to providing tax abatement as stimulation for economic development in Trophy Club. The Town will consider providing incentives in accordance with the procedures and criteria outlined in this document. The adoption of the guidelines and criteria by the Trophy Club Town Council shall not limit the discretion of the Town Council to decide whether to enter into a specific Tax Abatement Agreement; limit the discretion of the Council to delegate to its employees the authority to determine whether or not the Town Council should consider a particular application or request for tax abatement; or create any property, contract, or other legal right in any person to have the Town Council consider or grant a specific application or request for tax abatement. The adoption of the guidelines and criteria by the Town of Trophy Club shall not imply or suggest that the Town is under any obligation to provide tax abatement to any applicant. All applicants shall be considered on a case-by-case basis. 11. Criteria and Review All requests for tax abatement shall be reviewed by the Town Council for Trophy Club. The review process shall be based upon an evaluation of the criteria that each applicant will be requested to address in narrative format and such supplemental information as may be requested by Town. Following an assessment of the narrative response, the Town Council shall determine whether it is in the best interests of the Town to offer an abatement to the applicant. Additional consideration beyond the criteria will include such items as the degree to which the projectlapplicant furthers the goals and objectives of the Town or meets or compliments a special need identified by the Town. 111. Tax Abatement Limitations Tax Abatement shall be offered subject to the following limitations and criteria: RES 2005-XX A. Real Property. The Town Council of the Town of Trophy Club may agree in writing with the owner of taxable real property that is located in a reinvestment zone, but that is not in an improvement project financed by tax increments bonds, to exempt from taxation a portion of the value of the real property or of tangible personal property located in the real property, or both, for a period not to exceed ten (10) years. A Tax Abatement Agreement under this section is subject to the rights of holders of outstanding bonds of the municipality and shall be subject to the condition that the owner of the property make specific improvements or repairs to the property. B. Leasehold Propertv. The Town Council of the Town of Trophy Club may agree in writing with the owner of a leasehold interest in real property that is located in a reinvestment zone to exempt a portion of the value of the leasehold interest, if taxable, or of improvements or tangible personal property located on the real property subject to the leasehold interest, for a period not to exceed ten (10) years. A Tax Abatement Agreement under this section is subject to the rights of holders of outstanding bonds of the municipality and shall be subject to the condition that the owner of the leasehold interest make specific improvements or repairs to the property. C. Effective Exemption Period. An agreement may provide for the exemption of the real property in each year covered by the agreement only to the extent the real property value for that year exceeds its value for the year in which ' the agreement is executed. A Tax Abatement Agreement granted to a Project shall become effective on January 1 of the year following the issuance of a Certificate of Occupancy for the new facilities unless otherwise specified in the Tax Abatement Agreement. D. Tangible Personal Property. An agreement may provide for the exemption of tangible personal property located on real property in each year covered by the agreement, other than tangible personal property that (1) was located on the real property at any time before the period covered by the agreement with the Town, andlor (2) that is not inventory or supplies. E. Comprehensive Zoning Ordinance. Any improvement, repair, development, or redevelopment taking place under an agreement under these guidelines must conform to the Comprehensive Zoning Ordinance of the Town of Trophy Club. F. Value and Term of Abatement. Once a determination has been made that a tax abatement should be offered, the value and term of the abatement will be determined based upon information provided in the narrative response and as determined appropriate in the sole discretion of the Town Council. Provided however, that subsequent Agreements made with owners of property in a reinvestment zone must contain identical terms for the portion of the value of the property that is exempt and the duration of the exemption. RES 2005-XX G. Creditworthiness. The Town of Trophy Club reserves the right to verify the applicant's creditworthiness prior to granting a tax abatement and to review the financial condition of the Project during the term of the abatement. The applicant's creditworthiness shall be considered by the Town prior to entering into a Tax Abatement Agreement. H. Cost of Municipal Services. The Town of Trophy Club shall make a determination of the estimated cost of providing municipal services to the proposed Project. This cost shall be a factor considered by the Town Council when making a determination as to the granting of an abatement and the value and term of such abatement. IV. Procedural Guidelines Any person, organization or corporation desiring that Trophy Club consider providing tax abatement to encourage location or expansion of operations within the corporate limits of the Town, shall be required to comply with the procedural guidelines listed in this section. Nothing within these guidelines shall imply or suggest that Trophy Club is under any obligation to provide tax abatement in any amount or value to any applicant. Preliminary Application Steps A. Applicant shall complete the attached "Application for Tax Abatement" Exhibit "B". B. Applicant shall address all criteria questions outlined in the application in narrative format. C. Applicant shall prepare a plat showing the precise location of the property, all roadways within five hundred feet (500') of the site, and all existing land uses and zoning within five hundred feet (500') of the site. D. Applicant may, upon request of Town Council, be required to provide substantiation of the economic feasibility of the overall project to assist in determining the long-term benefit to the Town. E. Fourteen (14) days prior to the public hearing, the applicant must provide a complete legal description of the property and a general address of the property. F. Applicant shall complete all forms and information detailed in items A through E above and submit them to the Town Manager, RES 2005-XX Town of Trophy Club , 100 Municipal Drive, Trophy Club, Texas 76262. Application Review Steps A. All information in the application package detailed above will be reviewed for completeness and accuracy. Additional information may be requested as needed. B. The application will be forwarded to the Town Manager for distribution to the appropriate Town departments for internal review and comments. Additional information may be requested as needed. Consideration of the Application A. The completed application package and staff comments will be returned, with all relevant materials, to the Town Council for consideration. B. The Trophy Club Town Council may consider a Resolution calling a public hearing to consider establishment of a tax reinvestment zone. At least seven (7) days prior to the public hearing, the Town Secretary shall give written notice to the presiding officer to each other taxing unit that has taxing jurisdiction over real property within the proposed reinvestment zone and shall publish notice of the hearing in a newspaper of general circulation in the Town. The Trophy Club Town Council may hold the public hearing and determine whether the project is feasible and practical and would be of benefit to the land to be included in the zone and to the municipality after the expiration of the Tax Abatement Agreement. Additionally, the Town Council must find that the zone meets one of the applicable criteria for reinvestment zones. These findings must be approved by the Town Council at an open meeting and noted in the minutes for that meeting. D. The Trophy Club Town Council may consider adoption of an Ordinance designating the area described in the legal description of the proposed project as a reinvestment zone. E. The Trophy Club Town Council may consider adoption of a Resolution approving the terms and conditions of a contract between the Town and the applicant governing the provision of the tax abatement only at a regularly scheduled meeting of the Council. Provided however, that at least seven (7) days before the RES 2005-XX Town Council grants a tax abatement, the Town Secretary shall deliver written notice of the Town's intent to enter into a Tax Abatement Agreement to the presiding officer at each of the other taxing units in which the property is located. The notice shall include a copy of the proposed Tax Abatement Agreement. F. The Tax Abatement Agreement shall, at a minimum, contain terms that: 1. List the lund, number and location of all proposed improvements to the property; 2. Provide access to and authorize inspection of the property by the Town to ensure compliance with the agreement; 3. Limit the use of the property consistent with the Town's development goals; 4. Provide for recapturing property tax revenues that are lost if the owner fails to make the improvements as provided by the agreement or fails to meet the goals established by the agreement; 5. Specify each term that was agreed upon with the property owner and require the owner to annually certify compliance with the terms of the agreement to the Town and all other units, as applicable; 6. Allow the Town to modify or terminate the agreement at any time if the property owner fails to comply with the terms of the agreement, and provide that a retroactive amendment of a Tax Abatement Agreement shall not extinguish an existing tax liability; 7. Provide that a personlentity that does not qualify for an exemption on January 1 of any year may not receive the exemption that year; and 8. Specify that if a project granted a tax abatement ceases to operate or is no longer in conformance with the adopted guidelines of the Town, the Tax Abatement Agreement shall not remain in effect for the period of time during which the Project is not operating or is not in conformance. G. The governing bodies of any other applicable taxing unit may consider ratification of and participation in the abatement agreement between the Town and the applicant. RES 2005-XX H. Information on tax abatement provided to the Town of Trophy Club in connection with an application or request for tax abatement that describes the specific processes or business activities to be conducted or the equipment or other property to be located on the property for which tax abatement is sought is confidential and not subject to public disclosure until the Tax Abatement Agreement is executed. I.. The Town will send copies of the agreement to the Texas Comptroller's Office or other state agency as required by law in the year following the designation of a zone or the execution of a Tax Abatement Agreement as required by law. J. Any company approved for a tax abatement by the Town of Trophy Club, must achieve measurable progress, as specified in the Tax Abatement Agreement, pertaining to construction milestones, capital investment in real property improvements, business personal improvements, employment levels, etc., in a timely manner. If measurable progress is not made, the Town will exercise its options as outlined in the Tax Abatement Contract and pursuant to applicable law. Tax abatements may only be applied to incremental increases in valuation and will apply to tangible personal property, excluding inventory and supplies. V. Expiration of Tax Abatement Policy The guidelines and criteria adopted pursuant to this Tax Abatement Policy shall be effective upon adoption and remain in effect for a period of two (2) years. The guidelines and criteria may be amended or repealed prior to the expiration of the two (2) year period only by a favorable vote of three-fourths (%) of the members of the Trophy Club Town Council. VI. Severability In the event that any term, section, clause, sentence, paragraph or any part of this Tax Abatement Policy is adjusted by a court of competent jurisdiction to be invalid, such invalidity shall not affect, impair or invalidate the remainder of the guidelines and criteria contained in the Tax Abatement Policy. RES 2005-XX EXHIBIT "B" TOWN OF TROPHY CLUB APPLICATION FOR TAX ABATEMENT 1. Applicant Company's Name Company's Representative Mailing Address Telephone Number Fax Number Email Address 2. Property Owner Mailing Address Telephone Number Fax Number Email Address 3. Property Owner's Representative Mailing Address Telephone Number Fax Number Email Address 4. Property Address Property Legal Description (Provide attachment if by metes and bounds) 5. Located within Town of Trophy Club? Northwest Independent School District? Denton County? Tarrant County? 6. Description of Project 7. Date projected for occupancy of project/initiation of operations: RES 2005-XX i 8. Acreage of site: 9. Square footage of occupied space: 10. Type of occupancy: OwnerlOccupied LandlordITenant If leasing, what is the term of the lease? (Check all that apply) 11. The business is: Existing Expanding New Relocating (From out-of-State) Relocating (From another citylcounty in Texas) 12. Business Type: HotelIGroup Residence Retail Industrial Manufacturing Medical Wholesale Energy Entertainment ResearchlDevelopment Commercial/Real Estate Other 13. Type of property abatement requested: Real Personal Both RES 2005-XX Employment Impact 1. Please provide a schedule of projected employment milestones including: Initial employment (at occupancy) Projected employment (milestone) by (indicate date) Projected employment (milestone) by (indicate date) Anticipated full employment by (indicate date) 2. What is the number of new jobs that will be created? 3. What is the number of jobs, if any, that will be retained in Trophy Club by this project? 4. What is the number of jobs that will be relocated to Trophy Club from: The DFW Metroplex? Other locations? 5. What types of jobs will be created? 6. What will be the average annual salary? 7. What will the total annual payroll be? Fiscal Impact 3. Estimate of amount of direct property and sales tax generated: 1. What is the value of the Real Property improvements that will be added to the tax base? 2. What is the value of the Business Personal Property improvements that will be added to the tax base? TOTAL IMPROVEMENTS Please provide detailed description of the basis upon for your estimate: 4. What is the value of sales that will be subject to sales tax collection by the Town of Trophy Club? Community Impact RES 2005-XX Year (If applicable) $ Initial Year $ Year (If applicable) $ Is this a retention andlor expansion project of an existing Trophy Club business? How will this project affect existing businesses? What effect would the project have on the local housing market? What effect would the project have on existing residential neighborhoods? Will development of the project create any environmental impact? Air quality, water quality, visual quality, etc. Will any zoning changes be necessary to accommodate the project? Is the project compatible with the Town's Comprehensive Plan? Will the business occupy existing space? Will the business construct a new facility? Will the business occupy space that is currently planned or under construction? What is the projected impact on the Northwest Independent School District? Please summarize the overall impact on the Town of Trophy Club. Please describe the necessity in requesting property tax abatement? Describe the competitive, financial or other issues associated with this application. RES 2005-XX FOR INTERNAL USE ONLY RECOMMENDED TAX ABATEMENT Real Property: Length of Abatement (Years): Percentage of Abatement: Business Personal Property: Length of Abatement (Years): Percentage of Abatement: Estimated cost to the Town of Trophy Club to provide municipal services to the proposed Project: RES 2005-XX