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2005-020-ORD AMENDING ARTICLE IV TO CHAPTER 30 OF CODE OF ORDINANCES ENTITLED TAX EXEMPTION FOR HISTORICAL STRUCTURES ORDINANCE NO. 2005-020 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PARIS, PARIS, TEXAS, AMENDING ARTICLE IV TO CHAPTER 30 OF THE CODE OF ORDINANCES, ENTITLED TAX EXEMPTION FOR HISTORICAL STRUCTURES, TO PROVIDE A TAX EXEMPTION FOR NEW CONSTRUCTION IN HISTORICALLY DESIGNATED AREAS WITHIN THE CITY; PROVIDING FOR AN EXEMPTION OF THE INCREASE OF THE ASSESSED VALUE OF CERTAIN PROPERTIES FOR TAX PURPOSES WHICH ARE LOCATED IN AREAS OF THE CITY DESIGNATED AS HISTORIC DISTRICTS PURSUANT TO THE CITY'S HISTORIC PRESERVATION ORDINANCE AND THE CITY ZONING ORDINANCE WHICH SERVE AS SI'IlES FOR NEW, HISTORICALLY COMPATmLE CONSTRUCTION; ES1ABLISHING GUIDELINES AND CRITERIA FOR TAX EXEMPTION; PROVIDING A REPEALER; PROVIDING A SEVERABILITY CLAUSE; PROVIDING A SAVINGS CLAUSE; MAKING OTHER FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City Council of the City of Paris, in an effort to preserve, protect, and enhance the historical character and heritage of Paris, adopted Ordinance No. 2002-033 on August 1,2002, amending Chapter 7 of the Code ofOrdi=es of the City of Paris to adopt a new Article VII, Section 7-15 I through 7- I 64 thereto, entitled Hisrtoric Preservation, which, among other things, established the Paris Historic Preservation Commission and authorized the designation of historic landmarks and districts within the City; and, WHEREAS, on January 30, 2003, the City of Paris was designated by the United States Department of Interior as a Certified Local Government under the provisions of Section 101 (c) of the National Historical Preservation Act; and, WHEREAS, the City Council of the City of Paris adopted Ordinance No. 2003-019 on May 8,2003, which amended the City's Zoning Ordinance to create a Historic District designation within the City's Zoning Ordinance for properties identified as historical structures, areas, and landmarks within the City; and, WHEREAS, Article VIII, Section I-F of the Texas Constitution and Section 11.24 of the Texas Property Tax Code enable the City of Paris to exempt from taxation part or all of the assessed value of certain historically significant sites in need of tax relief to encourage their preservation; and, WHEREAS, the City Council of the City of Paris finds such tax relief is needed to encourage the preservation of historic structures and sites within designated historic districts of the City of Paris; and, -1- WHEREAS, the City Council also finds that such tax relief will provide economic incentive to develop projects in historic buildings worthy of preservation; and, WHEREAS, the City Council has previously adopted Ordinance No. 2004-055 establishing tax exemptions for properties which are repaired, renovated, or rehabilitated and are located in the City's Historic Districts; and, WHEREAS, the City Council further desiresto provide tax exemptions fornew, historically compatible construction also located in said Historic Districts; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PARIS, PARIS, TEXAS: Section 1. That the fmdings set out in the preamble to this ordinance are hereby in all things approved. Section 2. That Article IV to Chapter 30 of the Code of Ordinances of the City of Paris at Section 30-50, entitled Tax exemption for historically significant sites in need of tax relief, shall be and is hereby amended to add a new subsection (c) thereto, to re-designate the existing subsection (c) as subsection (d) and add a new paragraph 4 thereto, and to re-designate the existing subsection (d) to subsection (e) and revise said subsection, all to provide for a process of tax exemption for construction of new historically compatible structures, said amended Section 30-50 to read as follows: "Sec.30-50. Tax exemption for historically significant sites in need of tax relief. (a) Designation of historically significant sites in need of tax relief to encourage their preservation - For the purposes of this Article IV, and subject to the eligibility requirements of paragraph (d) of this Section, all properties located within the boundaries of Historic Districts, as the same are and shall be hereafter designated in accordance with Article VII, Chapter 7 of the Code of Ordinances of the City of Paris (the Historic Preservation Ordinance), and the Zoning Ordinance of the City of Paris, as amended by Ordinance No. 2003-019, shall be and are hereby designated as historically significant sites in need of tax relief to encourage their preservation. (b) Tax exemption of historically significant sites in need of tax relief to encourage their preservation; rehabilitation - Any property which is designated as a "historically significant site in need of tax relief to encourage its preservation" pursuant to the terms of this Article IV and which is substantially rehabilitated as provided herein, shall have exempted for a period of seven (7) years, 100% of any increase in the assessed value for ad valorem tax purposes in excess of the assessed value of the property for the tax year immediately prior to its rehabilitation; that is, the taxable value of said property for ad valorem tax purposes shall not for seven (7) -2- years exceed the value of the property for the tax year immediately prior to the rehabilitation. Only the historic structure and the land reasonably necessary for access to, and use of the structure shall be subject to the tax exemption. The exemption period shall begin on the first day of the tax year following completion of the rehabilitation project. Upon qualification, said exemption shall be available to any particular historically significant site one (I) time only for a period of seven (7) years as set forth above. ( c) Tax exemption of historically significant sites in need of tax relief to encourage their preservation; new construction - Any property which is designated as a "historically significant site in need of tax relief to encourage its preservation" pursuantto the terms of this Article IV and is the site for new, historically compatible construction as provided herein, shall have exempted for a period of three (3) years, 100% of any increase in the assessed value for ad valorem tax purposes in excess of the assessed value of the property for the tax year immediately prior to the construction of the new historically compatible strueture(s); that is, the taxable value of said property for ad valorem purposes shall not for three (3) years exceed the value of the property for the tax year immediately prior to the new construction. Only the new, historically compatible construction and the land reasonably necessary for access to, and use of the new historically compatible construction shall be subject to the tax exemption. The exemption period shall begin on the first day of the tax year following completion of the new, historically compatible construction project. Upon qualification, said exemption shall be available to any particular historically significant site one (1) time only for a period of three (3) years as set forth above. (d) Eligibility requirements for a tax exemption - To be eligible for a property tax exemption, a property must as a minimum meet the following requirements: 1. The property must meet the requirements for designation as a historically significant site in need of tax relief to encourage its preservation. 2. The property must meet all requirements for application and verification as set forth herein. 3. Tax exemption will be considered for eligible projects resulting in an expenditure to rehabilitate the property and existing historical structures in an amount of not less than five thousand dollars ($5,000.00) for property zoned or used for residential purposes, and not less than ten thousand dollars ($1 0,000.00) for property zoned or used for retail, office, commercial, or central area district purposes. Only expenditures for improvements to the exterior of structures, such as improvements to the -3- foundation, roof, outer walls, and fences, and/or expenditures for improvements to the property which would require the issuance of a Certificate of Appropriateness under the City's Historic Preservation Ordinance, shall be eligible to qualify for tax exemption. Expenditures on the interior of a structure shall not be used in determining whether a property has qualified for tax exemption. 4. Tax exemption will be considered for eligible projects resulting in an expenditure for new, historically compatible construction on the property in an amount of not less than one hundred thousand dollars ($100,000) for property zoned or used for residential purposes, and not less than two hundred thousand dollars ($200,000) for property zoned or used forretail, office, commercial, or central area district purposes. Only expenditures for the cost of constructing new, historically compatible structures, which would require the issuance of a Certificate of Appropriateness under the City's Historic Preservation Ordinance, shall be eligible to qualify for tax exemption. 5. To be eligible for such an exemption, no property taxes may be owed on the property itself, and the property owner must be current in the payment of all property taxes for property owned and located within the City of Paris at the time of application and throughout the term of the exemption. 6. All construction must be performed in full compliance with all applicable city codes. ( e) Grant of tax exemption discretionary - The grant of any tax exemption shall be at the sole discretion of the City Council of the City of Paris, and the creation of this policy providing for such tax exemption shall not in any way be construed to imply that any applicant for tax exemption under this Article IV has the right or entitlement to any such tax exemption. In exercising such discretion, the City Council may by future policy, amendments or otherwise determine those tax exemptions which best serve the needs of the City of Paris for preservation of historical structures or for the construction of new, historically compatible structures relative to the tax revenue lost as the result of such exemption." Section 3. That Article IV to Chapter 30 of the Code of Ordinances of the City of Paris, at paragraphs (c) and (d) of Section 30-51, is hereby amended to refer to new historically compatible construction, said amended paragraphs to read as follows: -4- "Sec. 30-51. Application process. * * * (c) Include detailed plans and/or descriptions of the proposed work demonstrating new construction or rehabilitation is in accordance with the City's Historic Preservation Ordinance, any applicable design guidelines, and all City codes; (d) Include cost estimates indicating the cost of the construction, repair or rehabilitation will equal or exceed the minimum requirements established in Section 30-50 (d)(3) and Section 30-S0 (d) (4) of this Article; * * *" Section 4. That Article IV to Chapter 30 of the Code of Ordinances of the City of Paris, Section 30-52, entitled Application review process, shall be and is hereby amended to refer to new, historically compatible construction, said amended Section 30-52 to read as follows: "Sec. 30-52. Application review process. Upon receipt of the sworn application, the City Manager, or his designee, shall forward the application to the Historic Preservation Commission and to appropriate City code officials for review. The Historic Preservation Commission shall review the proposed repair or rehabilitation or new historically compatible construction for conformance with the City's Historic Preservation Ordinance and any applicable design guidelines with regard to issuance of Certificates of Appropriateness where required. City code officials shall review the proposed construction for compliance with all applicable city codes. Following completion of its review, the Historic Preservation Commission shall notifY the City Manager accordingly. The City Manager shall approve a properly completed application as eligible for tax exemption, subject to verification of completion as provided herein." Section 5. That Article IV to Chapter 30 of the Code of Ordinances of the City of Paris, Section 30-53, entitled Verification process, shall be and is hereby amended to include references to new, historically compatible construction, said amended Section 30-53 to read as follows: "Sec. 30-53. Verification process. Upon completion of the repair or rehabilitation, or new, historically compatible construction, the applicant shall submit to the City Manager, or his designee, a sworn statement of completion acknowledging that the site has been substantially repaired or rehabilitated or new, historically compatible construction has been completed in accordance with the plan approved under this Article. In the instance of repair or rehabilitation, applicant must also present documentation verifYing that the cost of -5- repair or rehabilitation meets or exceeds the amounts established in Section 3 0-50 (d) (3) of this Article. In the instance of new, historically compatible construction, Applicant must also present documentation verifYing that the cost of the new, historically compatible construction meets or exceeds the amounts established in Section 30-S0 (d) (4) of this Article. The City Manager, or his designee, and the Historic Preservation Commission, upon receipt of the sworn statement of completion, but no later than thirty (30) days thereafter, shall make an investigation of the property and shall approve or disapprove that the property has been completed as required. If the repair, renovation, or new, historically compatible construction deviates in any way from the plans approved by the Historic Preservation Commission or the City's code officials, verification of completion shall be deemed unfavorable, and the applicant shall be required to complete or correct the repair, rehabilitation, or new construction in order to obtain the tax exemption provided by this Article, or appeal the City Manager's or Historical Preservation Commission's decision to the City Council. When the verification of completion receives a favorable review by the Historic Preservation Commission, the Commission shall notify the City Manager in writing of compliance. Thereafter, if the City Manager is likewise satisfied, the City Manager shall enter into a tax exemption agreement and execute a tax exemption certificate and forward same to the Lamar County Appraisal District. If required by the Lamar County Appraisal District, the City Manager or designee shall provide annually a list of sites eligible for tax exemption under this Article. " Section 6. That Article IV to Chapter 30 of the Code of Ordinances of the City of Paris, at Section 30-55 (b), shall be and is hereby amended to refer to new, historically compatible structures, said amended Section 30-55 (b) to read as follows: "Sec. 30-55 Alteration or destruction of property; recapture of taxes for non- compliance. *** (b) If the Tax Exemption Certification executed by the City Manager is timely recorded by the owner of the site in the Deed Records of Lamar County with the approved application, the tax exemption authorized herein shall constitute a covenant running with the land for a period of three (3) years as provided in Section 30-50 (c) of this ordinance or for a period of seven (7) years as provided in Section 30-50 (b) of this ordinance. Likewise, any tax exemption approved in accordance with this ordinance shall apply for future owners of the affected property for the remainder of the three (3) year or seven (7) year term (Whichever is applicable), provided the owner or owners execute an assignment of the tax exemption agreement in such form as the City shall specify. Should the current owner of the site ever cease to comply with the terms of the application, the tax exemption agreement, or this Article during the applicable three (3) year or seven (7) year period, the exemption may be revoked .6. for the years remaining within the applicable three (3) year or seven (7) year period, upon the finding of such non-compliance by the City Council, after giving notice of hearing to the owner. The City Manager or his designee shall advise the Chief Appraiser ofthe Lamar County Appraisal District of the revocation ofthe exemption and shall file an appropriate document in the deed records of Lamar County revoking the tax exemption." Section 7. That this ordinance shall not be construed so as to conflict with any state or federal statute. Section 8. That all ordinances or parts of ordinances in conflict herewith are hereby expressly repealed to the extent of such conflict only. Section 9. That if any section, subsection, paragraph, sentence, clause, phrase or word in this ordinance or the application thereof to any person or circumstance is held invalid by a court of competent jurisdiction, such holding shall not affect the validity or the remaining portions of this ordinance, and the City Council hereby declares that it would have passed such remaining portions of this ordinance despite such invalidity. Section 10. That this ordinance shall become effective on June 1,2005 PASSED AND ADOPTED this 18th day of May, 2005. ATTEST: ~"<2 ffi2:IJ . Clerk APPROVED AS TO FORM: -7-