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Home My WebLink About2-10-2000-13.04 - Resolution - 02/10/2000 RESOLUTION NO. 2-10-2000-13.04 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COLLEGE APPROVING THE GUIDELINES AND CRITERIA FOR TAX ABATEMENT. STATION WHEREAS, the city has used the ability to abate taxes in the past as an Economic Development incentive and wishes to continue that practice; and, WHEREAS, the city has previously established guidelines and criteria governing tax abatement; now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF COLLEGE STATION, TEXAS: Part 1: That the City Council's intention is to consider providing tax abatements, in appropriate cases. Part 2: That the City Council hereby approves the guidelines and criteria, "Exhibit A", attached hereto. Part 3: That this resolution shall take effect immediately from and after its passage. PRESENTED, PASSED AND ADOPTED on this the 10th day of February 2000. APPROVED: L~nr~i~lcllhaney, Mayor ATTEST: Connie Hooks, City Secretary APPROVED: HarVey Car~ c~Y -~ Brazos County City of College Station City of Bryan Brazos County Industrial Foundation Bryan/College Station Chamber of Commerce Bryan/College Station Economic Development Corporation EXHIBIT "A" ECONOMIC DEVELOPMENT GUIDELINES Revision #4 Historical notes: The original version of Economic Development Guidelines was approved by the EDC Board of Directors at the October 20, 1994 Board meeting. Revision # 1 was approved by the EDC Board of Directors on September 21, 1995. Revision #2 was approved by the EDC Board of Directors on February 15, 1996. Revision #3 was approved by the EDC Board of Directors on Septemberl 8, 1997. Revision #4 was approved by the EDC Board of Directors on October 20, 1999. ge INTRODUCTION Recipients of community incentives should be, but are not required to be, on the EDC Target Industry List: *Biotechnology *Call Centers *Corporate headquarters operations *Distribution *Information Technology *Manufacturing *Recycling and products from recycled materials *Value added to agriculture *Technology Transfer b) Primary Community Incentives: *Tax abatement (City of Bryan, City of College Station and Brazos County, only) *Developed land *Performance based financial assistance (e.g., reimbursement/payment of permanent/hard costs associated with relocation/expansion.) EDC Guidelines, Page 1 II. b) c) d) e) g) h) i) QUALIFYING STATEMENTS Community incentives, which includes all cash incentives, will be available to qualifying existing businesses and those recruited from outside Brazos County. Both existing and new businesses must qualify for incentives based on capital investment or gross payroll added in Brazos County and a time requirement for maintaining a physical location and conducting business in Brazos County. An existing business which meets the threshold minimum requirements for community incentives will automatically qualify for the next higher level of incentives. Cash incentives will be requested from only one of the following combinations of funding entities unless extraordinary circumstances exist or in the case of incentive magnitude being so large as to necessitate consideration of a variance to this part of the Guidelines: 1. EDC Development Fund 2. One City 3. Brazos County 4. One City and Brazos County Requests for incentives for companies relocating from one city to another in Brazos County requires both city managements be notified prior to any meetings subsequent to initial interview. Participants approved for the Incubator or Technology Transfer Programs and graduates thereof will be exempted from capital investment and gross payroll guidelines. Once a business is commercially profitable it will no longer be eligible under this paragraph, but will be considered on the same basis as existing local businesses. Community incentives will not be offered to businesses that would create product competition within Brazos County where Brazos County is the primary sales territory. Community incentives will not be offered to retail business. All recipients of community incentives will sign mutually agreed-upon performance agreements and contracts prior to receiving incentives based on capital investment or gross payroll, in addition to a requirement for the company to maintain a physical location and conduct business in Brazos County for a specified period of time. An economic and fiscal impact analysis will be conducted for each applicant for community incentives. The community return on investment (pay-back) time period projected by the impact analysis will, where possible, be seven years or under and anything longer will be approved on an exception basis.. Approval authorities may, at their discretion, require shorter return on investment time periods. A health and environmental risk assessment will be conducted for each applicant for community incentives, as requested by the EDC Board or a funding entity. EDC Guidelines, Page 2 J) k) l) Community incentive proposals shall be presented in a standard format, including all Guideline requirements. After presentation of community incentive proposalsto a prospect, the prospect will have a specified period of time in which to respond with acceptance, rejection or suggested changes to the proposal. When feasible the time period will be 30 days. The proposal will become null and void if not acted upon by the prospect within the specified time period, unless an extension of time for good cause is granted by the EDC or appropriate funding entity. The Board of Directors will consider the minimum hourly wage level and benefits when determining incentives for companies. III. a) DUE DILIGENCE Due diligence will be required of each prospect for community incentives as follows: 1. Business plan, to include, but not be limited to, executive summary, company history, historical and proforma financial information and company principal(s) resumes. 2. Fiscal and economic impact analysis (County, City and School), a copy of which will be sent to the Board. The economic impact analysis may be waived where cumulative cash flow outlays from the Development Fund are $100,000 or less. 3. Health and environmental risk assessment (at the request of the EDC Board and/or one or more of the funding entities) 4. Statements or suitable evidence of credit worthiness b) 5. Contract description (real estate lease, purchase, build-to-suit, etc.) 6. Summary document outlining major factors and impacts, both positive and negative, on the community, with emphasis on taxing authorities Due diligence packages will be reviewed and recommendations will be made to the appropriate decision-making authority by a Prospect Review Committee of four (4) and the EDC President/CEO through the EDC Executive Committee. The Prospect Review Committee will be appointed by the EDC Chairman from the EDC Board. The Board will receive due diligence packages at the same time as other committees for incentives over $10,000. IV. PROPOSAL PRESENTATION Presentations to the appropriate approval authorities will be preceded by the following steps for each prospect seeking community incentives: 1 - Project introduction EDC Guidelines, Page 3 b) -Description of company (name if possible), product, capital investment, gross payroll, size of building, acreage, etc. 2 - Progress report and preliminary proposal -Due diligence report and preliminary proposal for community incentives 3 - Final proposal and presentation for decision -Economic and fiscal impact analysis, health and environmental risk assessment, further due diligence and final incentives proposal No prospect report or proposal will be submitted to a decision-making authority without being first reviewed and approved by all preceding authorities. Proposals, impact analyses, and other materials related to the decision-making process will be delivered to the appropriate individuals at least two days prior to the meeting at which decisions are to be made regarding the proposal. A typical prospect presentation and approval process will flow as follows: c) (1) EDC (2) EDC (3) EDC (4) EDC (5) city Staff (Chamber of Commerce Staff for existing businesses), to... Prospect Review Committee, to... Executive Committee, to... Board of Directors, to .... Council(s) and/or Commissioners' Court Prior to presentation to the Board of Directors of an incentive proposal approval, an executive summary of such proposal, in standardized format, will be prepared and sent to Board members in the Board package prior to the Board meeting.. NOTE: The Chamber of Commerce will process all existing business proposals through the Guidelines system. V. APPROVAL AUTHORITY *Authority to approve projects for receipt of cash from the Development Fund will be vested as follows: -Up to $10,000 - EDC President/CEO and Chairman -$10,001 TO $25,000 - EDC Executive Committee -$25,001 To $100,000 - EDC Board i) The Executive Committee is authorized under circumstances they deem appropriate to poll the Board on decisions by fax, e-mail, or other written means and to receive hard copy vote. -Over $100,000 - The appropriate city council(s) and/or Commissioners' Court. Tax abatement and free or reduced cost land transactions can be approved only at this level. EDC Guidelines, Page 4 The Bryan Business Council (BBC) must approve all transactions pertaining to land owned by the BBC and the College Station City Council must approve all transactions pertaining to land owned by the City of College Station. EDC Guidelines, Page 5 PRIMARY COMMUNITY INCENTIVES TAX ABATEMENT The following will be used as Guidelines for tax abatement: Capital Investment: Capital Investment: Capital Investment: $2,000,000 to $4,000,000 $4,000,001 to $8,000,000 $8,000,001 + or or or Gross Payroll: Gross Payroll: Gross Payroll: Year $250,000 to $I,000,000 $1,000,001 to $2,500,000 $2,500,001 + 1 70% 70% 70% 2 50% 60% 70% 3 30% 50% 60% 4 20% 40% 50% 5 10% 30% 40% 6 20% 30% 7 10% 20% 8 10% Note: Requests for tax abatement will not be made to either College Station Independent School District or Bryan Independent School District. PERFORMANCE-BASED FINANCIAL ASSISTANCE AND LAND The following will be used as Guidelines for performance-based financial assistance: Capital Investment: Capital Investment: Capital Investment: $2,000,000 to $4,000,000 $4,000,001 to $8,000,000 $8,000,001 + or or or Gross Payroll: Gross Payroll: Gross Payroll: Assistance Category $250,000 to $1,000,000 $1,000,001 to $2,500,000 $2,500,001 + Performance Based Financial Assistance $15,000 to $40,000 $40,001 to $65,000 $65,001 to negotiable Acres of Land Up to 3 Up to 5 Negotiable OTHER COMMUNITY INCENTIVES NOTE: There can be other community incentives made available based on the nature, needs, quality and magnitude of the prospect. EDC Guidelines, Page 6