Tax Abatement Policy Renewal Presented by Robert Sturns, Economic Development Manager Housing & Economic Development Department May 4, 2010

Presentation Objectives Discuss the State legislation that requires adoption of a Tax Abatement Policy Outline the proposed changes to the existing Tax Abatement Policy Receive direction regarding the Proposed Tax Abatement Policy and discuss next steps

Tax Abatement Policy Legislation Chapter 312 of the Texas Tax Code requires that a municipality have “established guidelines and criteria governing tax abatement agreements” The “established guidelines and criteria” are effective for two years from the date adopted. Last policy was adopted on June 16, 2008

Proposed Changes Reduce threshold on capital investment from $10.0 M to $5.0 M for Commercial/Industrial, Mixed-Use and Business Expansion projects Reduce threshold on capital investment from $5.0 M to $2.0 M on residential projects eligible for abatement For multi-family residential and mixed-use projects, applicant will commit to a set number or certain percentage of handicap accessible units Reduce the application fee from $15,000 to an amount TBD with a minimum $2,000 being non-refundable

Proposed Changes Favorable consideration will be given to applicants for tax abatement that provide equal benefits for all employees Consideration for an additional 10% abatement for a LEED certified project (project would have to actually get the certification) Remove language in the policy regarding the applicant’s Board of Directors Clean-up language regarding evaluation by Council Committee

Next Steps Final Policy will be provided in June HED Committee packet Receive feedback from HED Committee Place an M&C and resolution on the June 15th Council agenda for consideration of the Tax Abatement Policy

Tax Abatement Policy Renewal Questions/Comments/Conclusion