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08-A Historic Tax Abate Ord.wpd DRAFT F:ALICE\ORDWORK\CURRENT\ Historic Tax Abatement Ord ORDINANCE NO. __________ AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PARIS, PARIS, TEXAS, AMENDING CHAPTER THIRTY TO THE CODE OF ORDINANCES, ENTITLED TAXATION, TO REPEAL THE EXISTING ARTICLE IV THERETO, ENTITLED “TAX ABATEMENT”, AND ADOPTING A NEW ARTICLE IV THERETO, ENTITLED “TAX ABATEMENT FOR HISTORICAL STRUCTURES”; PROVIDING FOR AN ABATEMENT OF THE INCREASE IN THE ASSESSED VALUE OF CERTAIN PROPERTIES FOR TAX PURPOSES WHICH RESULT FROM APPROPRIATE REPAIRS, RENOVATION, OR REHABILITATION TO SAID PROPERTIES IN AREAS OF THE CITY DESIGNATED AS HISTORIC DISTRICTS PURSUANT TO THE CITY’S HISTORIC PRESERVATION ORDINANCE AND THE CITY’S ZONING ORDINANCE; ESTABLISHING GUIDELINES AND CRITERIA FOR TAX ABATEMENT; 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 of Ordinances of the City of Paris to adopt a new Article VII, Section 7- 151 through 7-164 thereto, entitled Historic 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 1-F of the Texas Constitution and Section 11.24 of the Texas Property 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 NOW, THEREFORE, develop projects in historic buildings worthy of preservation; BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PARIS, PARIS, TEXAS: Section 1. That the findings set out in the preamble to this ordinance is hereby in all things approved. Section 2. That Article IV of Chapter 30 of the Code of Ordinances of the City of Paris, entitled “Tax Abatement,” the same consisting of Sections 30-50 through 30-59, shall be and is hereby in all things repealed. Section 3. That there is hereby established a new Article IV to Chapter 30 of the Code of Ordinances of the City of Paris, the same consisting of Sections 30-50 through 30-59, to be entitled “Tax Abatement for Historical Structures”, to read as follows: Sec. 30-50. Tax abatement for historically significant sites. “ (a) Designation of historically significant sites - For the purposes of this Article IV, all properties located within the boundaries of Historical 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. (b) Tax exemption of historically significant sites - Any property which is designated as a “historically significant site” pursuant to the terms of this Article IV which is certified in accordance with this Article IV to be in need of tax relief to encourage its preservation, and which is substantially rehabilitated as provided herein, shall have abated for a period of seven (7) years 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 renovation as follows: st 1 Year------------------------------100% abatement of added value nd 2 Year------------------------------100% abatement of added value rd 3 Year------------------------------100% abatement of added value th 4 Year------------------------------ 80% abatement of added value th 5 Year------------------------------ 60% abatement of added value th 6 Year------------------------------ 40% abatement of added value th 7 Year------------------------------ 20% abatement of added value Only the historic structure and the land reasonably necessary for access to, and use of the structure, shall be subject to the tax abatement. The abatement period shall begin on the first day of the tax year following completion of the rehabilitation project. Upon qualification, said abatement shall be available to any particular historically significant site one (1) time only for a period of seven (7) years as set forth above. -2- (c) Eligibility requirements for a tax abatement - to be eligible for a property tax abatement, a property must as a minimum meet the following requirements: 1.The property must meet the requirements for designation as a historically significant site. 2.The property must meet all requirements for application, certification and verification as set forth herein. 3.The property must be certified in accordance with the procedures set out herein as being in need of tax relief to encourage its preservation. 4.Tax abatement will be considered for eligible projects resulting in added real property tax value above the base year for an expenditure in an amount of not less than five thousand dollars ($5,000.00). 5.To be eligible for such an abatement, 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 abatement. 6.All construction must be performed in full compliance with all applicable city codes. (d) Grant of tax abatement discretionary - The grant of any tax abatement as provided in this Article IV 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 abatement shall not in any way be construed to imply that any applicant for tax abatement under this Article IV has the right or entitlement to any such tax abatement. In exercising such discretion, the City Council may determine those tax abatements which best serve the needs of the City of Paris for preservation of historical structures relative to the tax revenue lost as the result of such abatement. Sec. 30-51. Application process. Applications for a historically significant site tax abatement pursuant to this Article are to be filed with the City Manager, or such other city official designated by the City manager of the City of Paris, who shall be the agent for the City for the purposes of administering this Article. Each application must be signed by the owner of the property, be acknowledged before a notary public, and shall: (a) State the legal description; (b) Include an affidavit by the owner stating the proposed property is located within an Historic District (HD), that no taxes are owed thereon, and that no taxes are owed on any property in the City of Paris owned by the property owner; -3- (c) Include detailed plans and/or descriptions of the proposed work demonstrating rehabilitation is in accordance with the City’s Historic Preservation Ordinance and all City codes; (d) Include cost estimates indicating the construction, repair or rehabilitation will equal or exceed five thousand dollars ($5,000.00); (e) Include a projection of the estimated construction time and predicted completion date of the construction, repair or rehabilitation; (f) Authorize the members of the Historic Preservation Commission, the City Manager or designee, and elected officials to visit and inspect the property proposed for certification to verify that it is in need of construction, repair or rehabilitation and to verify construction, repair or rehabilitation; (g) Sign an agreement, styled Historic Preservation Tax Abatement Agreement, to in all things comply with the requirements of this Article regarding the tax abatement, agreeing to comply with all requirements of the City governing said improvements, providing for recapture of all abated taxes following noncompliance with the requirements hereof, and including such other terms and conditions as the City shall require; (h) Include a tax certificate showing all taxes due upon the property have been paid; (I) Provide any additional information to the Historic Preservation Commission, the City Manager or designee, and elected officials, which the owner deems relevant or useful, such as the history of the site, access to the site by the public, or any proposed changes in use of the site; (j) Provide such information as the owner shall deem appropriate and the City shall require to establish the proposed property and property owner are in need of tax relief to encourage the property’s preservation. Sec. 30-52. Certification process. (a) 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 for conformance with the City’s Historic Preservation Ordinance and 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. The Historic Preservation Commission shall also review and make findings and a recommendation to City council regarding whether or not the proposed property and the property’s owner are in need of tax relief to encourage the property’s preservation. In making such findings, the Historic Preservation Commission shall review any and all financial information, proposed construction cost information, and any other information presented by the applicant or requested by the Commission in making a determination as to -4- whether or not tax relief is necessary to encourage the property’s preservation. As part of such review process, the Historic Preservation Commission shall conduct a pubic hearing soliciting input from the general public, in accordance with its established procedure for such hearings, related to the issue of whether or not a tax abatement should be granted for the property. Following completion of its review, and making the necessary findings, the Historic Preservation Commission shall forward the minutes of its proceeding, its stated findings, and a recommendation with regard to said proposed tax abatement to the City Manager. Upon receipt of such material from the Historic Preservation Commission, the City Manager shall, within a reasonable time, place the matter upon a City Council agenda for determination of eligibility. (b) In determining eligibility, the City Council shall first determine that all the requirements of this Ordinance have been met and that only the historically significant site and the land reasonably necessary for access to, and use thereof, is to be provided favorable tax relief as provided in this Ordinance. The City Council shall also review the findings and recommendations of the Historic Preservation Commission as to whether or not the property and the property owner are in need of tax relief to encourage the property’s preservation. If eligibility is determined, the City Council shall authorize the City Manager to enter into a tax abatement agreement and to execute a tax exemption certificate upon verification of completion of repair or renovation. 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. Sec. 30-53. Verification process. Upon completion of the repair or rehabilitation, the certified 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 in accordance with the plan approved in accordance with this Article. Applicant must also present documentation verifying that the cost of repair or rehabilitation meets or exceeds the amounts established in Section 30-50 (c) 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 for certification. If the repair or renovation 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 or rehabilitation in order to obtain the tax abatement 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 execute a tax exemption certificate and forward same to the Lamar County Appraisal District. -5- Sec. 30-54. Property appearance guidelines. Properties that receive tax abatement in accordance with this Ordinance shall maintain said property in accordance with the requirements of the Historic Preservation Ordinance and all applicable City codes. Sec. 30-55. Alternation or destruction of property; recapture of taxes for non- compliance. During the abatement period, if the City Manager or his designee, or the Historic Preservation Commission, has reason to believe that a structure receiving tax abatement pursuant to this Article has been altered or totally or partially destroyed by the willful act or negligence of the owner or his/her representative, the City Manager or his designee shall immediately cause the matter to be scheduled for consideration by the City Council. If, after giving notice and hearing to the owner, the City Council determines that the structure receiving tax abatement pursuant to this Article has been totally or partially destroyed or altered by the willful act or negligence of the owner or his representative, then the tax abatement agreement shall terminate, all abatement of taxes shall likewise terminate, and the owner shall immediately repay to the City and all other local taxing entities all of the tax revenues that were not paid because of the abatement plus interest calculated at an annual rate of seven percent (7%). This provision shall not apply to destruction or alterations that result from acts of God. If the tax exemption certificate 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 abatement authorized above shall constitute a covenant running with the land for the seven (7) year period provided in this Article. Should the owner of the site ever cease to comply with the terms of the application and of this Article during such seven (7) year period, the abatement may be revoked for the years remaining within such seven (7) year period, upon the finding of such non- compliance by the City Council, after giving notice and hearing to the owner. The City Manager or his designee shall advise the Chief Appraiser of the Lamar County Appraisal District of the revocation of the abatement and shall file an appropriate document in the Deed Records of Lamar County revoking the tax abatement. In the event that any affected jurisdiction having granted tax abatement determines that the applicant or owner is in default of any of the terms or conditions contained in the tax abatement agreement, then the affected jurisdiction shall give the applicant or owner (60) days written notice to cure such default. In the event such default is not cured to the satisfaction of the affected jurisdiction within the sixty (60) day notice period, then the tax abatement agreement shall terminate, all abatement of taxes shall likewise terminate, and the owner shall immediately repay to the City and all other local taxing entities all of the tax revenues that were not paid because of the exemption plus interest calculated at an annual rate of seven percent (7%). -6- In every case of termination set forth above, the affected jurisdiction having granted the tax abatement may determine whether default has occurred by the applicant or owner in the terms and conditions of the tax abatement agreement, and shall so notify all other affected jurisdictions. Termination of the tax abatement agreement by any affected jurisdiction shall constitute simultaneous termination of all tax abatement agreements of all other affected jurisdictions.” Section 4. That this ordinance shall not be construed so as to conflict with any State or Federal statute. Section 5. That all ordinances or portions of ordinances in conflict with the terms and provisions of this ordinance shall be and are hereby repealed to the extent of such conflict only. Section 6. 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 the ordinance, and the City Council hereby declares that it would have passed such remaining portions of the ordinance despite such invalidity. Section 7. That this ordinance shall be effective December 1, 2004. PASSED AND APPROVED this the 8th day of November, 2004. ____________________________________ Curtis Fendley, Mayor ATTEST: _____________________________ Sherian Dixon, Assistant City Clerk APPROVED AS TO FORM: _____________________________ Larry W. Schenk, City Attorney -7-