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Memo�andum <br />To: c��y co���l <br />John Godwin, City Manager <br />FROM: Kent McIlyar, City Attorney <br />SUBJECT: Residential Tax Abatement Program for City of Paris <br />DATE: May 8, 2013 <br />BACKGROLIND: The City Council and staff have been discussing the development of a <br />Residential Tax Abatement Program for owners of existing single family structures as a way to <br />encourage remodeling, rehabilitation, or modernization of existing residential structures. City <br />may also incentivize new home construction by making residential tax abatements available to <br />owners of single-family lots throughout the City. <br />This program would be similar to the tax incentives that the City offers to persons that <br />rehabilitate or remodel historic homes located inside the designated Historic districts, but would <br />not require the property to be historically designated in order to be eligible for tax abatement. <br />STATUS OF ISSUE: <br />POLICIES TO BE ESTABLISHED BY PARIS CITY COUNICL: <br />1. Reinvestment Zone — City Council must identify those areas of the City of Paris for <br />Residential Tax Abatement incentives. The City Council could start with older parts of the <br />City that are in greater need of economic incentives to spur rehabilitation and remodeling <br />of existing housing stock and construction of in-fill housing. The Reinvestment Zone will <br />be identified by City map and must be adopted by formal ordinance or resolution. <br />2. Minimum Investment — The City Council must determine the financial parameters of <br />the Residential Tax Abatement Program, specifically, what is the minimum investment a <br />person must make in a single-family structure to be eligible for a tax abatement. This <br />could be a fixed dollar amount such as $5,000, $10,000 or $15,000 or you could make it a <br />percentage of the appraised value of the property. <br />For example, if the lot andlor structure was appraised at $20,000 by the Lamar County <br />Appraisal District, and the City Council required a minimum investment of twenty percent <br />(20%) of the appraised value to be eligible for a tax abatement, then the owner or builder <br />would have to put up a minimum of $4,000 to be eligible for tax abatement. <br />3. Term of Tax Abatement — Ten (10) years is the maximum term for a residential tax <br />abatement program under state law. The City Council can establish a program that abates <br />- - '7 3 <br />