CC Resolution No. 1600 50
RESOLUTION NO. 1600
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BAYTOWN,
TEXAS, ADOPTING TAX INCREMENT REINVESTMENT ZONE POLICIES
AND GUIDELINES; AND PROVIDING FOR THE EFFECTIVE DATE
THEREOF.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN,
TEXAS:
Section 1: The City Council hereby adopts the Tax Increment Reinvestment Zone
Policies and Guidelines, which are attached hereto as Exhibit "A" and incorporated herein for all
intents and purposes.
Section 2: This resolution shall take effect immediately from and after its passage by
the City Council of the City of Baytown, Texas.
INTRODUCED, READ, and PASSED by the affirmative vote of the City Council of the
City of Baytown, this the 141h day of August, 2003.
.ems C.
PETE C. ALFARO, Nfayor
ATTEST'
f
GAR! W. SMITH, City Clerk
APPROVED AS TO FORM:
NACIO RAMIREZ, S ., City Attorney
F:\Karen\Files\City Council\Resolutions\TaxReinvestmentZonePolicies.doc
CITY OF BAYTOWN, TEXAS
Policy Statement:
The City of Baytown is dedicated to the revitalization of neighborhoods and commercial districts
in the City of Baytown by using multiple development incentive tools, including Tax Increment
Reinvestment Zones (TIRZs or Zones). A TIRZ project should act as an economic stimulus to the
surrounding areas. By leveraging private investment for certain types of development within a
targeted area, a TIRZ can be a tool used to assist in financing needed public improvements and
enhancing infrastructure.
TAX INCREMENT REINVESTMENT ZONE GUIDELINES
A. Purpose of Guidelines
Any TIRZ that is designated must comply with the Tax Increment Financing Act.
The purpose of these guidelines is to establish the policy for the City of Baytown
to exercise the power granted by the Tax Increment Financing Act and Article
Vill, Section 1-g of the Texas Constitution to finance the development and
redevelopment of unproductive, underdeveloped or blighted areas within the City.
The City Council may designate a contiguous geographic area as a Zone to
promote development or redevelopment of the area, if the City Council
determines that development or redevelopment would not occur solely through
private investment in the reasonably foreseeable future.
B. Criteria
In considering creation of a Reinvestment Zone, City Council will take into
consideration the factors described in the Tax Increment Financing Act.
Additional considerations may include, but are not limited to, the following:
1) a substantial absence, deterioration or substandard condition in the
City's infrastructure, streets, water and sewer lines, and storm
drainage;
2) a statement from the applicant certifying that "but for' the creation
of the Zone, the investment or reinvestment would not occur; and
3) the area within the Zone must be not less than seventy-five (75)
acres for residential development or not less than twenty-five (25)
acres for commercial development/redevelopment.
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C. Redevelopment Activities
Redevelopment activities for the Zone must:
1) be in accordance with redevelopment and land use plans approved
by the Baytown Area Community Long-Range Planning
Commission and the Baytown Zoning Commission and consistent
with the City's Comprehensive Plan;
2) be reasonably likely to increase the aggregate taxable value of
property within the Zone by at least twenty percent (20%) during
the life of the Zone;
3) provide adequate infrastructure improvements to serve the Zone,
including, but not limited to, streets, water and wastewater facilities,
and drainage structures designed and constructed according to City
standards; and
4) provide relocation assistance for low/moderate persons residing in
the Zone who may be displaced by the implementation of the
project plan (as defined in the Tax Increment Financing Act) and as
such persons are defined by the U.S. Department of Housing and
Urban Development.
D. Application. Applicants requesting the City, whether by petition or otherwise, to
create a TIRZ with other incentives to support eligible types of development in
targeted areas must fully complete an "Application for Redevelopment." The
application and accompanying documentation must be finalized and submitted to
the City on or before October 1 in order for a Zone to be created and to take
effect the following tax year.
Pre-Application Review Process. Developer may request a meeting with
appropriate City Staff prior to submitting a TIRZ application. In order to address
TIRZ requirements and development processes.
Application Fee. A non-refundable application fee of$3,000.00 must accompany
all Applications for Redevelopment for TIRZ use. The application fee should be
in the form of a check or money order and made payable to the "City of Baytown"
to cover costs associated with reviewing and processing the application.
The City will require that applicants/developers desiring a TIRZ must, as part of
the application submission:
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1) demonstrate financial wherewithal to meet project costs and
complete the project (i.e., financial statement, complete Sources
and Uses budget or Letter of Credit from Bank);
2) submit a disclosure document listing owners, principals and general
partners to identify persons associated with the proposed
development. A condition of any subsequent approval for the
establishment of a TIRZ shall include the written notification within
30 days upon any change in the initially submitted information;
3) submit a completed market feasibility study;
4) delineate, in detail, the developer's equity contribution to the project
illustrating the proposed financial structure;
5) identify proposed security, collateralization or credit enhancement;
6) demonstrate commitment to the quality of development, the project
area and project completion;
7) submit detailed pro formas for the proposed project, including any
secured participation levels from each taxing entity;
8) submit a Phase I Environmental Site Assessment of the proposed
area not older than two years in accordance with guidelines set
forth in the American Society for Testing and Materials (ASTM),
Standard E1527-00, Practice for Environmental Site Assessments:
Phase I Environmental Site Assessment Process. Contingent upon
the findings of the Phase I ESA, the City may require completion
and submission of a Phase II Subsurface Investigation and
environmental remediation, if necessary, in accordance with
federal, state and local requirements. The City will also require the
applicant to assess and submit documentation regarding potential
environmental impacts, such as water quality, endangered species
and cultural resources;
9) submit a preliminary site plan of any proposed parks to include
layout of any proposed improvements;
10) demonstrate previous experience developing similar scale and type
of project;
11) submit a detailed listing of public improvements with estimated
costs (eligibility of said list is contingent upon City approval);
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12) submit a schedule indicating timing of public improvements (i.e.,
commencement and completion dates);
13) after obtaining a copy of the officially adopted TIRZ policy/eligibility
criteria (if any) from each taxing entity, specify whether the
proposed TIRZ meets the eligibility criteria;
14) certify that the applicant has submitted the following information to
each taxing entity, including the following:
a) a description of the developer;
b) a description of the development project;
c) a statement of how the proposed project qualifies under the
entity's TIRZ policy/eligibility criteria (if any) and why it is in
the entity's best interest to participate in the TIRZ;
d) a statement offering to answer any questions or meet with
the entity to discuss the project; and
e) copies of all correspondence and/or information provided to
the taxing entities;
15) assist the City, including paying the cost of preparations, in the
statutorily required presentations to the other taxing entities
subsequent to the Baytown City Council calling for a public hearing
for possible creation of a TIRZ;
16) agree to pay for professional consultants retained by the City
related to the project even if the project is not finalized and a TIRZ
is not established; and
17) submit the following:
a) a description of the proposed boundaries of the proposed
Zone, including both a map (showing existing uses and
conditions of real property in the Zone) and a legal
description;
b) tentative plans and schedules for the development or
redevelopment of the Zone, including conceptual drawings
or descriptions of the public improvements proposed to be
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financed by the Zone, including a preliminary estimate of the
total costs of the improvements;
c) an estimate of the general impact of the proposed Zone on
property values and the tax revenues of the City and the
other governmental entities levying ad valorem taxes
throughout the life of the proposed Zone;
d) a schedule indicating total appraised values for the proposed
Zone for the previous ten years (if available);
e) evidence that all tax arrearages and public liens on property
owned or controlled by the petitioner have been satisfied;
and
f) a statement certifying that "but for" the creation of the Zone,
the Zone would not occur.
F. Eligible Project Costs
In conformance with the Tax Increment Financing Act, the City shall consider the
"but for' requirements required for the creation of the Zone and make a
determination of the project costs necessary to implement the project plan and
reinvestment zone financing plan. The City may consider the following project
costs but is not limited to the following:
1) Off-site utilities required to bring utilities to the Zone (e.g., water,
sewer, road and drainage facilities, street lighting and traffic lights);
2) Upgrade existing infrastructure to advance future development
within the Zone (e.g., lift stations, water, sanitary sewer and storm
drainage improvements, turning lanes/intersection improvements,
water and wastewater treatment plant enhancements);
3) Land assembly costs;
4) Public infrastructure construction within the Zone, including water,
sanitary and storm sewer facilities, street lighting, signage and
streetscape/landscape improvements;
5) Specialty items that include the construction of sound barriers,
buffering landscape between residential and nonresidential uses,
and common recreation areas;
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6) Eligible project costs for a residential development, which may be
reimbursed at up to 70% of the total cost as approved on a case-
by-case basis;
7) Eligible off-site utility costs and costs associated with eligible
projects that provide a regional need, which may be reimbursed at
up to 100% as approved on a case-by-case basis; and
8) Other costs may be considered on a case-by-case basis.
The City may retain funds as provided in the Tax Increment Financing Act, to be
reimbursed for the following:
1) imputed administrative costs, including reasonable charges for the
time spent by employees of the City in connection with the
implementation of the project plan and reinvestment zone financing
plan;
2) the amount of any contribution made by the City from general
revenue for the implementation of the project plan;
3) payments made at the discretion of the governing body of the City
that the City finds necessary or convenient to the creation of the
Zone or to the implementation of the project plan and reinvestment
zone financing plan; and
4) operating costs of public facilities/services. If public
facilities/services are required to meet the demands of the new
development, City and applicant and/or developer will negotiate the
construction, operating costs, pro rata share and timing.
G. Term of Reinvestment Zone. As prescribed under Section 311.017 of the Tax
Increment Financing Act, Zones shall terminate on the earlier of:
1) termination date designated in the ordinance(s) creating and/or
amending the Zone; or
2) the date on which all project costs and interest have been paid in
full.
In addition, the duration of a Zone should not exceed 30 years from the creation
date of the TIRZ. City may elect to terminate a TIRZ if the City determines such
a termination is in the City's longer term development interests. Any
outstanding debt of the Zone would become the obligation of the City in such an
instance.
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Furthermore, any default of the terms contained in the Development Agreement
that is not cured within the 90-day time frame contained in the Development
Agreement may also result in Zone termination.
H. Project Plan and Reinvestment Zone Financing Plan
The board of directors of the Zone shall submit a proposed project plan and
reinvestment zone financing plan for the approval of City Council. The plans
must be prepared in accordance with the Tax Increment Financing Act.
I. Use of Funds
The tax increment or the proceeds of bonds, notes or obligations issued for any
project or projects secured by the tax increment may be used for any purpose
authorized in the project plan and reinvestment zone financing plan.
Proceeds shall be used for project facilities and improvements which are
approved by the City and which have an estimated average useful life at least
equal to the life of the Zone or notes financing such improvements, if any.
However, the City may use the tax increment or proceeds of bonds, notes or
obligations to reimburse a developer on a pro-rata basis for project facilities or
improvements with an estimated life which is less than the life of the Zone or
notes financing such improvements.
The funds of the Zone shall be budgeted, expended and audited in the same
general manner as City bond and tax funds with such changes required by the
provisions of state law. The costs of such City financial controls shall be included
in the costs of administration of the Zone. The Zone budget must be submitted
annually to the City Finance Department for approval. A copy of the Zone's
Annual Audit must be forwarded to the City Finance Department after board
approval.
J. Obligation to Reimburse a Developer
In consideration for the construction of public improvements by a developer and
pursuant to Section F above, the Zone shall reimburse a developer for qualified
costs of the public improvements from the tax increment attributable to the
property through (1) the issuance of bonds, notes or other obligations of the Zone
payable from the tax increment attributable to the property, or (2) the direct
payment of the tax increment attributable to the property. Any obligation of the
Zone to a developer constitutes an irrevocable lien on and pledge of the Tax
Increment attributable to the property. The lien on, pledge of, and rights in and to
the tax increment attributable to the property established, made and granted to
the developer shall constitute a first and senior lien thereon subject only to (1) the
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rights of any of the holders of bonds, notes or other obligations that have been
heretofore or are hereafter issued by the City or the County and are payable from
and secured by a general levy of ad valorem taxes throughout the taxing
jurisdiction of the City or the County, as applicable, and (2) the pledge of such
funds to pay or reimburse principal of and interest on Zone Obligations. A
developer, its successors and assigns shall have no right to payment out of any
funds of the City other than the tax increment attributable to the property and the
proceeds of Zone obligations.
K. Risks to Developer
THE DECISION TO ESTABLISH A TIRZ OR APPROVE A DEVELOPMENT
AGREEMENT RESTS SOLELY WITH THE BAYTOWN CITY COUNCIL.
MEETING THE GUIDELINES AND CRITERIA IN THIS OR SUBSEQUENT
POLICIES DOES NOT CREATE AN OBLIGATION FOR APPROVAL BY THE
CITY COUNCIL.
ANY CONTRIBUTIONS MADE BY APPLICANT OR OTHER DEVELOPER IN
ANTICIPATION OF REIMBURSEMENT FROM TAX INCREMENTS SHALL NOT
BE, NOR CONSTRUED TO BE, FINANCIAL OBLIGATIONS OF THE CITY OF
BAYTOWN, OTHER TAXING ENTITIES, OR APPLICABLE REINVESTMENT
ZONE BOARD. DEVELOPER SHALL BEAR ALL RISKS ASSOCIATED WITH
REIMBURSEMENT, INCLUDING INCORRECT ESTIMATES OF TAX
INCREMENT, CHANGES IN TAX RATES OR TAX COLLECTIONS, CHANGES
IN STATE LAW OR INTERPRETATIONS THEREOF, CHANGES IN MARKET
OR ECONOMIC CONDITIONS IMPACTING THE PROJECT, CHANGES IN
INTEREST RATES OR CAPITAL MARKETS, CHANGES IN DEVELOPMENT
CODE REQUIREMENTS, DEFAULT BY TENANTS, UNANTICIPATED
EFFECTS COVERED UNDER LEGAL DOCTRINE OF FORCE MAJUERE,
AND/OR OTHER UNANTICIPATED FACTORS.
L. Variances
An applicant for a TIRZ and/or developer seeking a reimbursement from an
existing TIRZ may request a variance to any provision of these guidelines. Such
requests will be considered on a case-by-case basis and must include the
justification for the variance request, the cost benefit to the developer and all
information, including developer pro-formas, financing documents, engineering
estimates, and any other documents the TIRZ board and the City deem
necessary and appropriate to review in consideration of the variance requested.
All requests will be promptly reviewed upon receipt of the information requested.
Approval for any variance must be by majority vote of both the TIRZ board of
directors, and the Baytown City Council in order to be effective. Neither the TIRZ
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board of directors nor the City Council is obligated to approve a request for a
variance to these guidelines.
The granting of a variance from the provisions of these guidelines is authorized
only when the TIRZ Board of Directors determines that the following conditions
exist:
a. The imposition of the terms, rules, conditions, policies and standards of
these guidelines would deprive the owner or applicant of the property of
reasonable use of the land or building;
b. The circumstances supporting the granting of the variance are not the
result of a hardship imposed or created by the applicant, and the general
purposes of these guidelines are observed and maintained;
c. The intent of these guidelines is preserved; and
d. The granting of such a variance will not be injurious to the public health,
safety or welfare.
Any variance granted under the provisions of this section will apply only to the
specific property and use upon which the variance was requested. All variances
granted shall be in writing, signed by the chairman of the TIRZ board of directors
and attested to by the secretary of the same, and maintained as a permanent
record of the Board.
CADOCUMENTS AND SETTINGSMGNACIO RAMIREZWY DOCUMENTS\TIRZ\BAYTOWN TIRZ GUIDELINES81303CLEAN.DOC
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