Item 6E CITY OF
SOUTHLAKE
MEMORANDUM
May 10, 2016
To: Shana Yelverton, City Manager
From: Alison Ortowski, Assistant City Manager
Subject: Item 6E: Approve Ordinance No. 1151, 2nd 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.
Action
Requested: Approval of Ordinance No. 1151 as presented.
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
potential 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
City of Southlake Values.-
Integrity
alues.Integrity ♦ Innovation ♦ Accountability ♦ Commitment to Excellence ♦ Teamwork
Item 6E: Ordinance No. 1151; City Council Meeting Date — May 17, 2016
Page 2 of 9
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.
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.
City Council approved this item on 1St Reading at the May 3,
2016 meeting.
Strategic Link: C4 Attract & keep top-tier businesses to drive a dynamic &
sustainable economic environment
Financial
Considerations: 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.
Legal Review: The proposed ordinance was reviewed and approved by the
City Attorney.
Alternatives: As the form and content of the designation of a reinvestment
zone is prescribed by Chapter 312 of the Texas Tax Code,
there is very little alternative to approving the ordinance as
proposed. Council can choose to not approve the
designation; however, without the designation, the City
cannot meet the terms of the MOU.
City of Southlake Values.-
Integrity
alues.Integrity ♦ Innovation ♦ Accountability ♦ Commitment to Excellence ♦ Teamwork
Item 6E: Ordinance No. 1151; City Council Meeting Date — May 17, 2016
Page 3 of 9
Supporting
Documents: Ordinance No. 1151
City of Southlake Values.-
Integrity
alues.Integrity ♦ Innovation ♦ Accountability ♦ Commitment to Excellence ♦ Teamwork
ORDINANCE NO. 1151
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
SOUTHLAKE, TEXAS, DESIGNATING A CERTAIN AREA AS A TAX
ABATEMENT REINVESTMENT ZONE FOR COMMERCIAL-INDUSTRIAL
TAX ABATEMENT, TO BE KNOWN AS REINVESTMENT ZONE NO. 1;
ESTABLISHING THE BOUNDARIES THEREOF AND OTHER MATTERS
RELATED THERETO; PROVIDING A SEVERABILITY CLAUSE;
PROVIDING A CUMULATIVE CLAUSE; AND PROVIDING FOR AN
EFFECTIVE DATE.
WHEREAS, the City Council of the City of Southlake, Texas (hereinafter referred to
as the "City") desires to promote the development or redevelopment of a certain
contiguous geographic area within the City of Southlake, Texas, by the creation of a
reinvestment zone for commercial-industrial tax abatement, as authorized by Chapter 312
of the Texas Tax Code, as amended; and
WHEREAS, a public hearing before the City Council of the City of Southlake,
Texas, was scheduled and held at p.m. on May 17, 2016, such date being at least
seven (7) days after the date of publication of the notice of such public hearing, pursuant
to Section 312.201(d) of the Texas Tax Code, as amended; and
WHEREAS, the City Council of the City of Southlake, Texas, held such public
hearing after publishing notice of such public hearing, and giving written notice to all taxing
units overlapping the territory inside the proposed Reinvestment Zone No. 1; and
WHEREAS, the City at such public hearing invited any interested person to appear
and speak for or against the creation of Reinvestment Zone No. 1 , the boundaries of the
zone, whether all or part of the territory should be included in such proposed zone, and the
concept of tax abatement.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF SOUTHLAKE, TEXAS, THAT:
SECTION 1
The findings set forth above are incorporated into the body of this ordinance as if
fully set forth herein.
SECTION 2
The City, after conducting such public hearing and having heard such evidence and
testimony has made the following findings and determinations based upon the testimony
presented:
(a) That a public hearing on the adoption of Reinvestment Zone No. 1 has been
properly called, held and conducted, and that notice of such hearing has been published
as required by law and mailed to all property taxing units overlapping the territory inside
the proposed Reinvestment Zone No. 1; and
(b) That the boundaries of Reinvestment Zone No. 1 should be the area as described
and/or depicted in Exhibit A, which is attached hereto and incorporated herein for all
purposes; and
(c) That creation of Reinvestment Zone No. 1 will result in benefits to the City and to
the land included within the zone, and the improvements sought are feasible and practical;
and
(d) That Reinvestment Zone No. 1 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"; and
(e) That Reinvestment Zone No. 1 as described an/or depicted in Exhibit A meets the
criteria for the creation of a reinvestment zone as set forth in the City of Southlake, Texas,
Tax Abatement Guidelines and Criteria; and
(f) That the improvements proposed for the Reinvestment Zone are feasible and
practical and would be a benefit to the land to be included in the zone and to the City after
the expiration of any tax abatement agreement.
SECTION 3
Pursuant to Section 312.201 of the Texas Tax Code, as amended, the City hereby
creates a tax abatement reinvestment zone for commercial-industrial tax abatement
encompassing only the area described and/or depicted in Exhibit A, and such zone is
hereby designated, and for identification shall be known as "Reinvestment Zone No. 1".
SECTION 4
Reinvestment Zone No. 1 shall take effect immediately upon passage of this
ordinance. Reinvestment Zone No. 1 is effective for five (5) years and may be renewed
for periods not to exceed five (5) years.
SECTION 5
This ordinance shall be cumulative of all provisions of ordinances and of the Code
of Ordinances of the City of Southlake, Texas, as amended, except where the provisions
of this ordinance are in direct conflict with the provisions of such ordinances and such
Code, in which event the conflicting provisions of such ordinances and such Code are
hereby repealed.
SECTION 6
Should any sentence, paragraph, subdivision, clause, phrase or section of this
ordinance be adjudged or held to be unconstitutional, illegal or invalid, the same shall not
affect/ the validity of this ordinance as a whole, or any part or provision thereof other than
the part so decided to be invalid, illegal or unconstitutional, and shall not affect the validity
of the Code of Ordinances as a whole.
SECTION 7
The City Secretary of the City of Southlake is hereby directed to publish this
ordinance to the extent required by law.
SECTION 8
This ordinance shall take effect immediately from and after its passage and
approval, and it is so ordained.
PASSED AND APPROVED ON FIRST READING this 3rd day of May, 2016.
Laura Hill
Mayor
ATTEST:
Lori Payne, TRMC
City Secretary
PASSED AND APPROVED ON SECOND READING this 17th day of May, 2016.
Laura Hill
Mayor
ATTEST:
Lori Payne, TRMC City Secretary
EFFECTIVE:
APPROVED AS TO FORM AND LEGALITY:
City Attorney
Exhibit A
Legal Description
Reinvestment Zone No. 1
City of Southlake, Texas
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