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2024-038 - Amending the Guidelines & Criteria for the 5 In 5 Housing Infill Development ProgramRESOLUTION NO. 2024-038 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS AMENDING THE GUIDELINES AND CRITERIA OF THE 5 IN 5 HOUSING INFILL DEVELOPMENT PROGRAM; MAKING OTHER FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; AND DECLARING AN EFFECTIVE DATE. WHEREAS, on February 10, 2020, the City Council of the City of Paris, Texas passed Ordinance No. 2020-005 creating Reinvestment Zone 2020-1, designating certain areas inside the city limits to be eligible for the Residential Tax Abatement Program; and WHEREAS, after a public hearing on January 10, 2022, the City Council passed Resolution No. 2022-003 stating its intent to establish the 5 In 5 Housing Infill Development Program (hereinafter "the Program"), including such incentives as low cost land sales and residential tax abatements, and adopting guidelines and criteria for the Program; and WHEREAS, in Resolution No. 2022-003, City Council designated an area within Reinvestment Zone 2020-1 (the "Program Area") as being eligible for the Program; and WHEREAS, on July 25, 2022, the City Council approved Resolution No. 2022-055 expanding the Program to allow properties immediately adjacent to the Program Area to be eligible to participate; and WHEREAS, on August 28, 2023, Council approved an agreement with Catalyst Commercial, Inc. for a Housing Assessment to determine particular housing needs in the city; and WHEREAS, although the Program has been very successful, and the city has entered into agreements with several developers under the guidelines thereof, on March 11, 2024, staff requested, and City Council agreed to, a 90 day moratorium for new agreements under the Program so that staff could review existing guidelines and incentives in light of the results of the Housing Assessment, which results were expected to be delivered within the moratorium period; and WHEREAS, on June 10, 2024, staff requested, and City Council agreed to, extend the moratorium for an additional 60 days due to the final report on the Housing Assessment's not having been delivered until towards the end of the original 90 day period; and WHEREAS, having reviewed the results of the Housing Assessment and taking into consideration the city's experiences with the workings of the Program to date, staff has presented revised Program criteria and guidelines for Council's consideration; and WHEREAS, City Council has reviewed the proposed revised guidelines and criteria for the Program and find said revisions to be in the best interest of the city and its residents; 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. Section 2. The City hereby amends the guidelines and criteria of the 5 in 5 Residential Infill Development Program in conformance with ,xhbit A,attached hereto and incorporated herein by reference. Section 3. This resolution shall become effective from and after the date of passage. PASSED AND APPROVED this 261h day of August, 2024. �HEC17 ''j' ATTEST: _ , Tv �iniceEl�liis,'Deputy City Clerk P OV ^D AS TO FORM: 46 --- Stephanie H. Harris, City Attorney Mihir Pankaj, Mayor Exhibit A PL -FORM -0007 (rev 08/24) ;XAS em it ans 1wach g.. r het CITY OF PARIS, TEXAS APPLICATION FOR RESIDENTIAL TAX ABATEMENT (5 in 5) Applicant: Name: DBA: Mailing Address:.. ............... _.._... mm....._ ... Telephone #: ..� ... Email: Owner: Owner: Name: DBA: Mailing Address:, m_.._. Telephone#: Property Parcel(s) Proposed for Agreement: No. LCAD # Adress Lot Block Addition 1. 4. 5. Add additional sheets if necessary. sa 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 (check one): Ci SF '.J 2F D MF 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.: Applicant's Signature:......... Date: Owner's Signature: �....... ... Date: Is ITEXAS PL -INFO -0007 (rev 08/24) 5 IN 5 HOUSING INFILL DEVELOPMENT PROGRAM GUIDELINES, CRITERIA & APPLICATION FORM CITY OF PARIS, TEXAS Revised August 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 three (3) to five (5) year residential tax abatement of City property taxes depending on housing type. 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 new construction of residential 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 i of 7 PL -INFO -0007 (rev 08/24) IG X A S Texan,,s Reci h hilt,,, I� 4' r 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. 11. 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 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. Page 2 of 7 PL -INFO -0007 (rev 08/24) J TEXT Wftef°e Te rar s Reach, Higher' 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. Limitations: 1. Maximum of 10 dwelling units per agreement. 2. All projects must be at 80% completion prior to consideration of a new infill housing agreement. 3. Pre -Approved building plans may be accepted. 4. No zoning change unless there is a substantial change in neighborhood or compatible with the future land use map. Iv. Incentives Water/Sewer tap fees Page 3of7 Incentive Table Incentives Ingle -Family �- .,_..W... u lex _ Multi -Family _.��. Low -Cost Residential Lots .�� Tax Abatement .... __�,,....... �-.�.._..�w,��.._.... V5 -year 100% 3 -year 100% 3 -Year Decreasing ear 1: 100% Year 2: 75% Year 3: 50% Reduced Building x'100% %/100% for sprinkled Ian Review building OR - '0% non -sprinkled uilding Reduced Permit 100% 100% for sprinkled 25% 'Fees uilding OR - 50% non -sprinkled wilding educed rates on 25% 25% v.._.. 25% Water/Sewer tap fees Page 3of7 FoOART"'1191EX A S l h",er �ZZeacf, H�gflee` PL -INFO -0007 (rev 08/24) Low -Cost Sale of Foreclosed Properties -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 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 15C 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. Reduced Fees for Building Plan Review and Permitting - The Applicant will be entitled to reduced rates for building plan review and permit fees as referenced in the Incentive Table for all new dwelling units under agreement with the City. Reduced Fees for Water & Sewer Tap - The Applicant will be entitled to reduced rates for water and sewer tap fees, where required by the Public Works Department, as referenced in the Incentive Table for all new dwelling units under agreement with the City. Claw Back Provision -The Applicant who enters into an Agreement with the City of Paris shall construct 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 ofthe 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 the agreed upon new dwelling -units 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 Page 4 of 7 F"I'll, t IS04,�en 7exans Reach Higher PL -INFO -0007 (rev 08/24) property fails to make all the Residential Improvements as provided in the Agreement regardless of how many dwelling units applicant builds. Compliance with all other City Requirements - 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. Incomplete Applications shall not be processed. 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 A: Applicant shall work with City Staff to identify eligible City Trustee or other parcels within the defined geographic area. City Staff will provide a list and corresponding map from which City Trustee parcels may be reviewed. B. A notarized 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 will be reviewed over the course of the Agreement. C. 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. D. 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. 4. If an application for the 5 In 5 Housing Infill Development Agreement is to be 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. 5. If the Applicant's property is not found to be eligible, the application will be rejected. 6. The City Council reserves the right to amend these policies and guidelines as needed. Page 5 of 7 t 1 p k�R,u,kX ��r�� °el��, vVii, re IQ°� a fu 'ha pw iG 1 IVt-w PL -INFO -0007 (rev 08/24) VI. 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: 1. Estimated value of new structure or residential improvements to be constructed. 2. Total amount of value to be abated depending on the terms of the Agreement. 3. 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. 5. 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 (LCAD) 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 the new 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 PL -INFO -0007 (rev 08/24) �\� 'TEXAS A/Iere,T x.....r�s keac improvements: Type improvements for new Construction (check one): 0 SF ❑ 2F ❑ MF Total Number of Dwelling Units: Estimated Value of improvements by type: Estimated Start Date of Construction: IT.,.. _._... .... Estimated Date of Completion of Project(s) . ...... ._...__.........����.�,.,__.................� ,.._......_ Description of Project (attach site plan, floor plan, etc.): Applicant's Signature:,,W�..,�, ........ Date: Owner's Signature: Date: Page 7 of 7