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HomeMy WebLinkAboutO-1999 2328 Adopting Tax Increment Reinvestment Zone Guidelines for the City of La Porte ORDINANCE NO. 99 - 2 AN ORDINANCE ADOPTING TAX INCREMENT REINVESTMENT ZONE GUIDELINES FOR THE CITY OF LA PORTE; FINDING COMPLIANCE WITH THE OPEN MEETINGS LAW; AND PROVIDING AN EFFECTIVE DATE HEREOF. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LA PORTE: Section 1. The City Council of the City of La Porte hereby adopts Tax Increment Reinvestment Zone Guidelines, in form attached to this ordinance as Exhibit "A", incorporated by reference herein, and made part hereof for all purposes. Section 2. The City Council officially fords, determines, recites, and declares that a sufficient written notice of the date, hour, place and subject of this meeting of the City Council was posted at a place convenient to the public at the City Hall of the City for the time required by law preceding this meeting, as required by the Open Meetings Law, Chapter 551, Texas Government Code; and that this meeting has been open to the public as required by law at all times during which this ordinance and the subject matter thereof has been discussed, considered and formally acted upon. The City Council further ratifies, approves and confirms such written notice and the contents and posting thereof. Section 3. This Ordinance shall be effective from and after its passage and approval, and it is so ordered. PASSED AND APPROVED, this �`� day of 111 \I , 1999. CITY F LA POR E By: ATTEST: --4110,f(tbek_e'l -4Le&ID Martha A. Gillett City Secretary APPROVED: Knox W. Askins City Attorney EXHIBIT "A" CITY OF LA PORTE, TEXAS TAX INCREMENT REINVESTMENT ZONE GUIDELINES A. Purpose of Guidelines The purpose of these guidelines is to establish the policy of the City of La Porte as it relates to the power granted by Chapter 311 of the Texas Property Tax Code (Tax Code) and Article b, Section 1-g of the Texas Constitution (together cited as the Tax Increment Financing Act) to finance the development and redevelopment of unproductive, underdeveloped or blighted areas within the City. State law allows a municipality to designate an area as a Tax Increment Reinvestment Zone (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. There are two different methods of creating a Zone. One is City initiated and the other is initiated by the property owners. The second method has its beginning when a petition is submitted to the City. While a large portion of the law applies to both types, there are enough differences in creating the Zones that the two types will be discussed separately, beginning with the Zone created by petition. 1. Creation of Zone by Petition The owners of property constituting at least fifty (50%) percent of the appraised value of the property in an area, may petition the City for the creation of a Zone. Such petition is legally required for creation of a Zone if the Zone contains more than ten (10%) percent residential property based on existing use (referred to as a Residential Zone, if less than 10%, it is referred to as a Commercial Zone). a. In considering a petition for creation of a Zone, Council will take into consideration the factors applicable to a City created Zone, which are described in Section A 2 a. Additional considerations are as follows: 1. a decrease in the aggregate property value of at least twenty (20%) percent over the most recent ten (10) years; 2. a substantial absence, deterioration or substandard condition in the City's infrastructure, streets, water and waste water lines, and storm drainage; and 3. A statement certifying that "except for" the creation of the Zone, the reinvestment would not occur. 1 Revised 5/12/99 b. The area within the Zone must be contiguous and be not less than twenty (20) acres. c. Documentation required with Petition Submission of a petition under 311.005(a)(5) of the Tax Code to create a Zone for the purpose of tax increment financing must be accompanied by a Preliminary Financing Plan. Both the petition and Preliminary Financing Plan must be finalized and submitted to the City on or before September 1,in order for a Zone to be created and to take effect the following tax year. The plan must include: 1. 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; 2. tentative plans and schedules for the development or redevelopment of the Zone, including conceptual drawings or descriptions of the public improvements proposed to be financed by the Zone, including a preliminary estimate of the total costs of the improvements; 3. an estimate of the general impact on 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; 4. a schedule indicating total appraised values for the proposed Zone for the previous ten years (if available); 5. evidence that all tax arrearages and public liens on property owned or controlled by the petitioner has been satisfied; and 6. a statement certifying that "except for" the creation of the Zone, it would not be properly developed. 2. Creation of Zone by City An area may be designated as a Zone by the City Council, if it meets the conditions listed below: a. The area is determined to substantially arrest or impair the sound growth of the City because of the presence of: 1. substantial number of substandard, slum, deteriorated, or deteriorating structures; 2 Revised 5/12/99 2. the predominance of defective or inadequate sidewalk or street layout; 3. faulty lot layout in relation to size, adequacy, accessibility, or usefulness; 4. unsanitary or unsafe conditions; 5. the deterioration of site or other improvements; 6. tax or special assessment delinquencies which exceed the fair market value of the land; 7. evidence of chronic abandonment or demolition of commercial or residential structures; 8. defective or unusual conditions of title; 9. conditions that endanger life or property by fire or other cause; or that 10. the area of the proposed Zone is predominately open and because of obsolete platting, deterioration of structures or site improvements or other factors substantially impair or arrest the sound growth in the City. b. The area within the Zone must be contiguous and be not less than twenty (20) acres. c. The area within the Zone currently contains ten percent (10%) or less residential use. The remainder of the guidelines apply to the Zone, regardless of whether it was created by petition or initiated by the City. B. Redevelopment Activities Redevelopment Activities for the Zone must: 1. be in accordance with redevelopment and land use plans approved by the Planning and Zoning Commission, and consistent with the City's Comprehensive Plan; and 2. be reasonably likely to increase the aggregate taxable value of property within the Zone by at least twenty (20%) percent during the life of the Zone; and 3 Revised 5/12/99 3. provide adequate infrastructure improvements to serve the Zone, including but not limited to streets, water and waste water facilities, and drainage • structures, designed and constructed according to City standards; and 4. provide relocation assistance for low/moderate persons resident in the Zone who may be displaced by the implementation of the project plan (as defined by 311.002(2) of the Tax Code), and as such persons are defined by the U.S. Department of Housing and Urban Development. C. Procedures for Creating a Reinvestment Zone 1. Before adopting an ordinance providing for a Reinvestment Zone, these actions must occur, in the following sequence: a. City Council must schedule a public hearing to allow public comment on the proposed Zone. Notice of this hearing must be published in a newspaper having general circulation in the City at least seven (7) days prior to the hearing. • b. At least sixty (60) days before the scheduled public hearing, City Council must notify in writing the other taxing jurisdictions that levy real property taxes in the Zone that it intends on establishing a Zone. This notice must contain: 1. a description of the proposed boundaries of the Zone; 2. tentative plans for development or redevelopment of the zone; 3. an estimate of the general impact of the proposed Zone on property values and tax revenues. c. A Preliminary Financing Plan must be prepared and sent to the other affected taxing jurisdictions. D. Powers of the Zone 1. The City's current Land Use Regulations and Zoning Ordinance shall apply to all development within the Zone. 2. However, the City may authorize by ordinance the enforcement of additional land use controls authorized by statute subject to the following: a. Subject to the approval of the City Council, the board of the Zone may adopt additional powers granted by the provisions of state law found in Chapter 211, Local Government Code necessary to implement the Zone Project Plan and Reinvestment Zone Financing Plan. 4 Revised 5/12/99 b. Any additional land use component shall include a description of the proposed land use regulations, a description of the economic and financial need for each land use regulation and a description of the effect of the comprehensive plan on the economic integrity of the Zone Project Plan and Reinvestment Zone Financing Plan. The land use component shall be reviewed annually by the Zone's board to ensure that both the public and private investment in the Zone are protected, and if additional restrictions are required, may approve amendments and changes for City Council review and approval. c. The Land Use Plan may impose maximum height, minimum square footage on new construction, maximum lot coverage and other restrictions to provide for sufficient private investment in the Zone's development or redevelopment to support Zone bonds, notes or obligations. d. Any additional land use controls shall be operative for at least the life of the Zone, and the Board may, with City Council approval, provide that a restriction adopted by the Board continues in effect after the termination of the Zone. If the land use controls continue after the termination of the Zone, such restrictions shall be treated as if adopted by the City in the first instance. e. The Board shall contract with the City for the purpose of enforcement of any additional land use controls authorized for use in the Zone. f. Essentially, the City's Zoning Ordinance establishes the process for identifying and terminating nonconforming uses. Lawful nonconforming uses in Zones may be terminated as follows: 1. when the use ceases or is abandoned; or 2. when the primary structure has been demolished or when rehabilitation in excess of 50% of the assessed value of the improvement at the time of Zone creation is completed; or 3. when a sufficient period of time has elapsed to allow the recovery of the owner or owners investment in the nonconforming use or uses g. Nonconforming business uses may not be altered or expanded in any residential area in the Zone (e.g. no additional new employees, outside storage or parking may be created). 5 Revised 5/12/99 3. Under current Texas law, the City cannot delegate or extend to the Board its power of eminent domain. If the applicable state law is amended to permit the delegation of extension of such power, the policy of the City is not to authorize the delegation or extension of its power to the Board. In addition, the City will utilize its power of eminent domain within the Zone only if the City Council finds that a public purpose will be served by such an exercise of the City's power. If the Board proposes to condemn property for purposes related to redevelopment or urban renewal, the City will not exercise its power of eminent domain unless the City Council additionally finds that the property or the area immediately surrounding that property contains a substantial number of substandard, slum, deteriorated, or deteriorating structures. Provided, however, that in no event will the City condemn a residential homestead for purposes of redevelopment or urban renewal unless City Council finds that the property proposed to be condemned is, in fact, in a substandard or blighted condition. 4. The City will hold a public hearing prior to the approval of a Land Use Plan for the Zone in accordance with the City's Zoning Ordinance. The City will provide notice to all property owners within the Zone by certified mail, return receipt requested not less than fifteen (15) days prior to the hearing. 5. The City Council by ordinance may authorize the Board to provide for the management and administration of a public improvement district created within the Zone, as provided in such district's service plan required by law. 6. The City will not consider the creation of Municipal Utility Districts within the Zone. E. Eligible Project Costs 1. In conformance with 311.002 of the Tax Code, the City shall consider the "except for" requirements required for the creation of the Zone and make a determination on a case by case basis of the project costs necessary to implement the Project Plan and Reinvestment Zone Financing Plan. In general, the City may consider the following project costs as eligible, but is neither obligated nor limited to the following: a. Off-site utilities required to bring utilities to the Zone (e.g. water, waste water, road and drainage facilities, street lighting and traffic lights); b. Upgrade existing infrastructure to provide additional capacity for future development of properties within the Zone (e.g. lift stations, 6 Revised 5/12/99 water and waste water improvements, turning lanes/intersection improvements, waste water treatment plant enhancements); c. Land purchase for public facilities and construction of projects that serve the general public such as overpasses, interchanges roadway beautification, convention centers, amphitheaters, marinas, park improvements, etc. d. Oversizing of infrastructure within the Zone, including water, waste water, streets (arterial or greater), drainage (major channels and detention basins) and street lighting. e. Specialty items such as signage, streetscape/landscape improvements and including the construction of sound barriers, buffering landscape between residential and nonresidential uses, and common recreation areas shall be considered on a case by case basis. f. In general, the City will not consider as eligible costs the public infrastructure or land acquisition costs for individual developments within the TIRZ boundaries that serve only that development. g. Exceptions to the policy on eligible costs will be considered on a case by case basis. 2. The City may retain funds as provide in Chapter 311.002 of the Tax Code to be reimbursed for the following: a. administrative costs attributed to others, plus 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; b. the amount of any contribution made by the City from general revenue for the implementation of the project plan; and c. 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. F. Board of Directors The Composition of the Board of Directors is determined by the Tax Increment Financing Act. For a Commercial Zone (less than 10% of the Zone is currently residential use), the Board of Directors consist of at least five (5) and no more than fifteen (15) 7 Revised 5/12/99 members. Each taxing unit that levies real property taxes in the Zone may appoint one member of the Board. City Council determines the total size of the Board and appoints the remaining members, not to exceed a total of fifteen (15) members. To be eligible for appointment, individuals will be a qualified voter in the City or be at least eighteen (18) years of age and own real property in the Zone. For a Residential Zone(more than 10% of the Zone is currently residential use), the Board of Directors consists of nine (9) members. Each participating school district or county may appoint one (1) member. The State Senator and the State Representative in whose districts the Zone is located are members of the Board. Each may designate another person to serve in his/her place. The remaining members are appointed by City Council. To be eligible for appointment, an individual must be eighteen (18) years of age or own real property in the Zone or be an agent of a person who owns real property in the Zone. Board members serve two (2) year terms. The chairman is appointed by City Council to serve a term of one (1) calendar year. G. Project Plan and Reinvestment Zone Financing Plan The Zone Board of Directors 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 311.011 of the Tax Code. H. Use of Funds 1. 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. 2. 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. 3. 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 Secretary after Board approval. 8 Revised 5/12/99