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2024-002 - Reauthorizing the City to become eligible to participate in Residential Tax Abatements related to the 5-in-5 Housing Infill Redevelopment ProgramRESOLUTION N0. 2024-002 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS REAUTORIZING THE CITY TO BECOME ELIGIBLE TO PARTICIPATE IN RESIDENTIAL TAX ABATEMENTS RELATED TO THE 5 IN 5 HOUSING INFILL REDEVELOPMENT PROGRAM AND READOPTING THE GUIDELINES AND CRITERIA RELATED TO SAME; MAKING OTHER FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; AND DECLARING AN EFFECTIVE DATE. WHEREAS, Sec. 312.002 of the Texas Tax Code requires local taxing entities to state their intent to participate in abatement agreements and to adopt guidelines and criteria for granting tax abatements; and WHEREAS, on October 14, 2013 in Ordinance No. 2013-036, the City Council designated Reinvestment Zone No. 2013-1 for residential tax abatements; and WHEREAS, on February 9, 2015, the City Council passed Ordinance No. 2015-002 amending Reinvestment Zone 2013-1 for Residential Tax Abatements to expand it to include all Council Districts in the City and designated the new reinvestment zone as Reinvestment Zone No. 2015-1; and WHEREAS, in 2021, City Council re -authorized Reinvestment zone 2015-01 and renamed it Reinvestment Zone No. 2020-1; and WHEREAS, by Resolution No. 2022-003, on January 10, 2022, City Council adopted the 5 in 5 Housing Infill Redevelopment Program (the "Program"), including guidelines and criteria for residential tax abatements within the designated Program area, which area falls within Reinvestment Zone 2020-1; and WHEREAS, City Council revised said guidelines and criteria on July 25, 2022 in Resolution 2022-055; and WHEREAS, pursuant to Texas Tax Code Sec. 312.002(c), guidelines and criteria for tax abatements are effective for two years from the date adopted; and WHEREAS, the City Council continues to desire to participate in a residential tax abatement program related to the Program; and WHEREAS, on January 8, 2024, the City Council held a public hearing on the reauthorization of the Program and readoption of the guidelines and criteria therefor as required by law, and after considering any testimony offered therein, wishes to reauthorize participation in the Program and to reauthorize the guidelines and criteria therefor; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS, THAT: Section 1. The findings set out in the preamble to this resolution are hereby in all things approved and are incorporated herein for all purposes. Section 2. The City hereby elects to be eligible to participate in a residential tax abatement program related to the Program and hereby readopts the 5 In 5 Housing In -Fill Development Program attached hereto and incorporated herein as Exhib' Section 3. The City Council hereby redesignates the defined geographic area for properties to be eligible to participate and enter into an agreement for the 5 In 5 Affordable Housing In -Fill Program represented in the map attached hereto and incorporated herein as Exhibit "B". Section 4. This resolution shall become effective from and after the date of passage. PASSED AND APPROVED this 8th day of January, 2024. ATTEST: r Cn .' J t' ce Ellis, City Clerk ie H. Harris, City Attorney i �d B!' Hughes, Mayor Exhibit A 5 IN 5 HOUSING INFILL DEVELOPMENT PROGRAM GUIDELINES, CRITERIA & APPLICATION FORM CITY OF PARIS, TEXAS Readopted January 8, 2024 I. GENERAL PURPOSE AND OBJECTIVES The City of Paris, working with our local government partners, is seeking to provide a series of builder incentives designed to encourage new home construction for the purpose of neighborhood revitalization and the provision of work force housing. New home construction within the existing interior of the community can have a positive effect towards reinvestment in our neighborhoods by providing stability and enhanced character, as well as a means to expand our community's local labor force. Focusing on the existing interior of the City allows the builder to utilize existing infrastructure rather than the extension of costly streets and utilities in undeveloped lands at or beyond the urban fringe. To achieve this purpose, the City will offer a series of incentives: 1. Where applicable, the City will provide low cost residential lots in the Program Area in tax foreclosure city receivership. If a builder obtains properties through other traditional means within the Program Area, other incentives within this policy may apply. 2. The City will offer a five (5) year 100% residential tax abatement of City property taxes. 3. The City will offer reduced rates on building plan review and permit fees. 4. The City will offer reduced rates on labor charges on water and sewer tap fees. The city staff will work with interested builders to identify parcels from a pool of tax sale lots in trustee status to develop a list of properties that will be suitable for the construction of new dwelling units. This may consist of single-family, two-family, medium density, or high density residences. Prior to any construction occurring from which the builder is seeking incentives, the builder will enter into an Agreement to be approved by the City Council for the construction of a minimum of five (5) or more dwelling units on one (1) or more parcels. Each of the dwelling units subject to the Agreement must be constructed under the terms of the agreement within five (5) years from the date of the Agreement, unless such deadline is extended by subsequent approval of the City Council. All parcels under the Agreement must be built upon within five (5) years to satisfy the terms of the Agreement. Failure to achieve this goal will result in certain claw backs as provided in the Agreement. All applications shall be considered on a first come, first serve basis. There will be no income guidelines under this program for occupants of the dwelling units, whether owner or renter occupied. In the event the applicant constructs a new dwelling unit and sells said unit, the tax abatement shall lapse and be terminated as to that parcel unless the City Council approves an assignment of the tax abatement agreement to the new owner. Page 1 of 7 In order to further encourage local development, employment, and enhancement of our economy, to be eligible for incentives in this policy, building materials and fixtures used in the construction of new dwelling units, where possible, must be purchased locally within the City of Paris. II. DEFINITION OF TERMS Act - The Property Redevelopment and Tax Abatement Act, Texas Tax Code Ann. 312.001 et. seq., as amended from time to time. Agreement - A contractual agreement between an applicant and the City of Paris for the purposes of a 5 In 5 Housing Infill Development Program to include an economic development agreement pursuant to Chapter 380 of the Texas Local Government Code and a residential tax abatement agreement pursuant to the Act. Applicant - An owner, proposed owner, builder or authorized agent of the owner of eligible property seeking an agreement under this policy. Base Year Value — The assessed value of eligible property on January 1, preceding the date of execution. Eligible Property - Property located in the defined Program Area and Immediately Adjacent thereto, whether foreclosed on due to taxes or not. Also, property located outside the Program Area if foreclosed on due to taxes. Immediately Adjacent property — Property which lies immediately next to the boundary of the Program Area, including property across a street or intersection or located diagonally therefrom. New Structure - Residential improvements made to a property previously undeveloped or a vacant parcel which is placed into use by means other than by expansion or modernization without full demolition of an existing substandard or condemned structure. Program Area - An area depicted in "Exhibit B" of the approved resolution for the 5 In 5 Housing Infill Development Program, which area is wholly within the boundaries of Reinvestment Zone 2020-1 for the purpose of residential tax abatements. Residential Improvements - The construction of new residential structures and all the appurtenances thereto. This term includes single family, duplexes and multi -family structures. Value of Improvements — The appraised value of the Residential Improvements as determined by the Lamar County Appraisal District and as described in the Agreement. III. ELIGIBILITY AND GUIDELINES Real property is determined eligible under this policy as provided in the Definitions. If property is eligible, an Applicant may apply for an Agreement to receive incentives provided for in this Page 2 of 7 policy. For tax foreclosed properties, all taxing jurisdictions shall be required to sign off on the low cost land sale according to the provisions of State Law prior to transfer of the property to the applicant. Minimum Investment — To be eligible for residential tax abatement, an Applicant must construct a new structure or structures on the property parcel(s) identified in an Agreement between the applicant and the City. Incentives Low Cost Sale of Foreclosed Proerties — As part of their agreement, an applicant may choose to purchase eligible properties that are in a state of tax foreclosure. These properties are strictly first come, first serve and the City makes no warranty on having available properties for this incentive. The City will work with the Lamar County, Paris Independent School District, and Paris Junior College to seek a low cost sale of the foreclosed property, but the City can only guarantee a low cost of its share. Tax Abatement - An Applicant who has satisfied all the criteria and guidelines for the low cost property sale and residential tax abatement as set out herein, will be eligible for a 100% five (5) year tax abatement on each parcel on which a dwelling unit or units are constructed and completed. The abatement will become effective on January 1St of the year following issuance of a Certificate of Completion following final construction inspection. As provided in the Act, a tax abatement may only be granted for the value of the Residential Improvements which exceed the base year value of the property and which are listed in an Agreement between the City of Paris and the applicant, subject to such limitations as the City of Paris may require. The base value will be set as of January l' of the year in which the Agreement is executed. Upon completion of construction, the Applicant shall provide a copy of all material and fixture purchase invoices to prove that those materials and fixtures were purchased locally within the City of Paris when possible. The tax abatement is available only for improvements made after the execution of the Agreement. The Agreement may not be approved by the City Council until at least thirty (30) days after notice of the consideration and possible action on the Agreement has been posted. Re; iew and Permitting — The Applicant will be entitled to reduced Reduced Fees Fees fox Buildin �Plan Rev... rates for building plan review and permit fees on a cumulative basis for all new dwelling units under agreement with the City according to the following schedule: Total Dwelling Units Plan Review Fee Discount Building Permit Fee Discount 5-9 100% 50% 10-19 100% 75% 20+ 100% 100% Reduced Fees for Water & Sewer Ta L Labor — The Applicant will be entitled to reduced rates for water and sewer tap labor fees, where required by the Public Works Department, on a cumulative basis for all new dwelling units under agreement with the City according to the following schedule: Page 3 of 7 Total Dwelling Units Water Tap Labor Sewer Tap Labor Fee Discount Fee Discount 5-9 50% 50% 10-19 75% 75% 20+ 100% 100% Claw Back Provision — The Applicant who enters into an Agreement with the City of Paris shall construct at least five (5) or more new housing dwelling units on one (1) or more parcels within five (5) years from the effective date of the Agreement, or the City shall have the right to automatically take back any undeveloped parcel under the terms of the agreement and transfer of the property by all taxing entities. This shall be recorded with or as a part of the deed as a right of reversion for all uncompleted construction lots deeded under this agreement against the property. The Applicant may request approval of an extension for such failure to construct a new residential dwelling unit(s), based upon reasonable circumstances, as may be approved by the City Council under a subsequent revised agreement. Parcels under the agreement cannot be sold or assigned to another individual except by prior approval and re-assignment of the parcel(s) and approval of a new agreement by the City Council. Failure to meet the requirements of constructing a minimum of five (5) dwellings within the five (5) year period will result in a reversion of all parcels upon which Residential Improvements have not been constructed and completed to the City and will result in the Applicant being ineligible to participate in this program in the future. As a further claw back provision, and in accordance with Texas Tax Code Sec. 312.205, the Agreement shall provide for recapturing property tax revenue lost as a result of the agreement if the owner of the property fails to make all the Residential Improvements as provided in the Agreement regardless of how many dwelling units applicant builds. om liance with all other Citi Rei uirements --- The Applicant shall be fully responsible for compliance with all zoning, subdivision platting, and building code requirements as may specifically pertain to the subject parcel(s) under the approved Agreement. The applicant shall be fully responsible for all such costs which may include, but not be limited to: Zoning Changes, Special Use Permits, Variances, Platting and Surveying Costs, Plan Preparation, and Building Permit Fees. V. APPLICATION PROCEDURES Applications for an Agreement with the City shall be reviewed for completeness. City Staff shall determine whether the application satisfies guidelines and criteria and Staff may request additional information or documents from Applicant. City Staff will make final recommendations on each application to the City Council. Any Applicant desiring approval of an Agreement shall comply with the following procedural guidelines. All applications shall be evaluated on their own merits within the parameters of these Guidelines and Criteria. 1. Preliminary Application Steps Page 4 of 7 A. Applicant shall work with City Staff to identify eligible tax foreclosure City Trustee or other parcels within the defined geographic area. City Staff will provide a list and corresponding map from which tax foreclosure City receivership parcels may be reviewed. The Applicant may submit an application for this program at the same time with an application for a building permit(s). If the Applicant for the building permit is not the owner of the real estate and does not make application for an agreement on behalf of the owner, the City Staff shall notify the owner (according to the most current records of the Lamar County Appraisal District records) by certified mail, return receipt requested, that the application must be signed and filed with the City within ten (10) business days of receipt of the affidavit of ownership notice. B. A pre -approval letter must be attached to the application from Applicant's financial institution stating that the Applicant will have financial capital available to complete all new dwelling unit construction under the five (5) year Agreement with the City. Verification of such financial capability may be reviewed over the course of the Agreement. C. If the building permit applicant does not to apply for an Agreement prior to the time that the building permit is issued, or if the owner fails to respond to the written notice of availability for the agreement, this policy shall be considered waived by the applicant and/or owner. City staff shall make a record to reflect owner's election not to participate in the program or to document that owner did not respond to City's notice of opportunity to participate in the program. The refusal or waiver to participate in the program by the building permit applicant or owner shall be binding on subsequent owners of the real property. D. A complete legal description shall be provided with a copy of the current deed of the land, unless the parcel(s) are being transferred by deed without warranty by the City of Paris. E. Applicant shall complete all forms and information detailed above and submit all forms to the City of Paris Director of Planning and Community Development. 2. All information in the application package detailed above will be reviewed for completeness and accuracy. Additional information may be requested as needed. If necessary, applicant will meet with City staff to discuss details of the application and to prepare presentation of the application to the City Council. 3. The application shall designate whether the dwelling(s) to be constructed are to be retained for ownership, or sold to another owner upon completion of construction. The applicant shall also provide an estimate of the value of improvements as required for building permit application. 4. If an application for the 5 In 5 Housing Infill Development Agreement is to be Page 5 of 7 recommended for approval by staff, then an Agreement as defined herein with the City of Paris will be prepared by the City Attorney for approval by the City Council. If the Applicant's property is not found to be eligible, the application will be rejected and returned to Applicant. 6. The City Council reserves the right to amend these policies and guidelines as needed. V1. LEGAL DOCUMENTATION PREPARATION The Director of Planning and Community Development and the City Attorney will be responsible for drafting the required Agreement in accordance with state law and this Policy. The legal document will include the following: Estimated value of new structure or residential improvements to be constructed. 2. Total amount of value to be abated over five (5) years. Effective date and the termination date of abatement. 4. Description of the Residential Improvements, schedule of completion, property description, all required City approval requirements and a platted lot site plan or sketch of the parcel(s) to be platted and developed. Applicant agrees to make the new structure or residential improvements available for inspection by City of Paris, or its authorized representatives, and Lamar County Appraisal District (LOAD) during construction and upon completion of the project. 6. Contractual obligations in the event of default, violation of terms or conditions, delinquent taxes, recapture and administration. 7. A signed and notarized statement as an attachment to the application agreeing to construct five (5) dwelling units on one (1) or more parcels within five (5) years from the date of City Council approval of an Agreement, unless extended by the City Council, or consenting to allow the City to automatically take back the parcel(s) under the initial terms of an approved agreement. Page 6 of 7 CITY OF PARIS, TEXAS APPLICATION FOR RESIDENTIAL TAX ABATEMENT (5 in 5) Property Owner: Name Current: Name Planned* Builder or Contact (if different than current/planned owner): Name: Mailing Address: State GC License No: Telephone Number: email Property Parcel(s) Proposed For 5 In 5 .._ _ _...._ .. . Agreement: (Please submit an attached list of addresses and/or LCAD #'s on Excel Spreadsheet, if possible) No. LCAD Address Lot Blk. Addition 3. Add additional sheets if necessary. Full Legal Description: Include as an attachment a full legal description with metes and bounds or a copy of the deed, if available. Improvements: Type improvements for new Construction: SF_ 2F3F_QuadMF® Total Number of Dwelling Units: Estimated Value of Improvements by type: Estimated Start Date of Construction: Estimated Date of Completion of Project(s) Description of Project (attach site plan, floor plan, etc.: Owner's Signature: Applicant(s) Signature: Page 7 of 7 Date: Date: