Item 4H
Approve Ordinance No. 1151, 1st Reading, establishing a Tax Abatement Reinvestment Zone in the City of Southlake, Texas as authorized by the Property Redevelopment and Tax Abatement
Act, Chapter 312 of the Texas Tax Code
Item 4H
Hello Mayor and members of the City Council. This is Alison Ortowski and I will be presenting Item 4H, Ordinance No. 1151
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Requested Action
Approve Ordinance No. 1151, 1st Reading, establishing a Tax Abatement Reinvestment Zone in the City of Southlake, Texas as authorized by the Property Redevelopment and
Tax Abatement
Act, Chapter 312 of the Texas Tax Code
The action you are being requested to take is to…
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Background Information
On September 1, 2015, the City Council directed City Manager Shana Yelverton to enter into a Memorandum of Understanding (MOU) with TD Ameritrade whose purpose was to establish the mutually-agreed
upon terms of a future incentive agreement between the two entities. In addition to establishing infrastructure cost participation on roadway, water and sewer line construction, the
terms of that MOU also included the following:
“The parties desire to enter into an ad valorem tax abatement agreement pursuant to Chapter 312 of the Texas Tax Code to exempt from
taxation: (i) up to 90% of the increase in the value of the Property for a period not to exceed 10 years; and (ii) up to 90% of the value of tangible personal property that is brought
onto the Property after the execution of the tax abatement agreement, for a period not to exceed 10 years.”
In order to grant TD Ameritrade this tax abatement, the City must adopt
an ordinance designating a reinvestment zone that meets the criteria for the creation of a tax abatement reinvestment zone as set forth in Section 312.202(a) of the Texas Tax Code, as
amended, and in particular Section 312.202(a)(6) of the Texas Tax Code, in that it is “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 City.”
The TD Ameritrade
project meets this requirement with its projected development investment and job creation numbers.
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Reinvestment Zone Overview
Ordinance No. 1151 includes as Exhibit A the plat and legal description for the TD Ameritrade site which will serve as the boundaries for the zone.
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City of Southlake Strategy Map
The City of Southlake provides municipal services that support the highest quality of life for our residents, businesses, and visitors. We do this by being an exemplary model of balancing
efficiency, fiscal responsibility, transparency, and sustainability.
C1 Achieve the highest standards of safety & security
C2 Provide travel convenience within City & region
C3 Provide attractive & unique spaces for enjoyment of personal interests
C4 Attract & keep top-tier businesses to drive a dynamic & sustainable economic environment
C5 Promote opportunities for partnerships & volunteer involvement
Serve our Customers
Manage the Business
B1 Achieve best-in-class status in all City disciplines
B2 Collaborate with select partners to implement service solutions
B3 Enhance resident quality of life & business vitality through tourism
B4 Provide high quality services through sustainable business practices
B5 Enhance service delivery through continual process improvement
B6 Optimize use of technology
Provide Financial Stewardship
Promote Learning and Growth
F1 Adhere to financial management principles & budget
F2 Invest to provide & maintain high quality public assets
F3 Achieve fiscal wellness standards
F4 Establish & maintain effective internal controls
L1 Ensure our people understand the strategy & how they contribute to it
L2 Enhance leadership capabilities to deliver results
L3 Attract, develop & retain a skilled workforce
L4 Recognize & reward high performers
L5 Empower informed decision-making at all levels in the organization
C6 Enhance the sense of
community by providing excellent customer service and citizen engagement opportunities
L6 Foster positive employee engagement
Deliver on Our Focus Areas
This item supports the City’s strategy through strategic corporate objective C4 (read from slide)
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Equivalent to $60 million development
Financial Considerations
Annual Benefit During Abatement $298,263 (avg)
Current Annual Benefit ~$20,000
Annual Benefit After Abatement $1,242,029 (avg)
The creation of this reinvestment zone does not financially obligate the City. However, it does enable the City to enter into a tax abatement agreement with TD Ameritrade as agreed
upon in the MOU.
The agreement will be structured to provide TD Ameritrade with a ten-year, 90% tax abatement for ad valorem and business personal property taxes.
It is estimated
that the value of this abatement is approximately $7.8 million.
The current annual benefit the City receives from the vacant land is approximately $20,000. The annual benefit to
the City during the abatement period is estimated to be $298,263, which means that the annual revenue to the City will increase an estimated $278,263 during ten year abatement period.
Following termination of the abatement, the annual benefit to the City is estimated to increase, on average, to $1,242,029.
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Legal Review
Finally, the proposed ordinance was reviewed and approved by the City Attorney.
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Questions?
Alison Ortowski, 817-748-8261
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