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04 Historic Structure Tax Exemp ORDINANCE NO. 2004-055 AN 0 RD IN AN CE OF THE CITY CO UN CIL 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 "T AX EXEMPTION FOR RISTO RI CAL STRUCTURES"; PROVIDING FOR AN EXEMPTION OF THE INCREASE IN THE ASSESSED VALUE OF CERTAIN PROPERTIES FOR TAX PURPOSES WHICH ARE REPAIRED, RENOVATED, OR REHABILITATED AND ARE LOCATED 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 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, am~nding 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 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 preseryationof historic structures and sites within designated historic districts of the City of Paris; and, WHEREAS, the City Council also finds that such tax relief will provide economic incentive to develop projects in historic buildings worthy of preservation; NOW, THEREFORE, -1- 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 are 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 Exemption for Historically Significant Sites," 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 subj ect to the eligibility requirements of paragraph (c) 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 - 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) 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 (1) time only for a period of seven (7) years as set forth above. .(c) 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- 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 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 ($10,000.00) 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 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. 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. 5. All construction must be performed in full compliance with all applicable city codes. (d) 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 relative to the tax revenue lost as the result of such exemption. Sec. 30-51. Application process. Applications for a historically significant site tax exemption 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, b~ 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, 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 (c)(3) of this Article; (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, representatives of the Lamar County Appraisal District, and elected officials to visit and inspect the property proposed for exemption 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 Exemption Agreement, to in all things comply with the requirements of this Article regarding the tax exemption, agreeing to comply with all requirements of the City governing said improvements, providing for recapture of all exempted taxes in the event of 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 and the City Manager or designee, or representatives of the Lamar County Appraisal District, which the City, the Commission, the District, or 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. 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 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. Sec. 30-53. Verification process. Upon completion of the repair or rehabilitation, the applicant shall submit to the City -4- 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) (3) 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 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 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. Sec. 30-54. Property appearance guidelines. Properties that receive tax exemption in accordance with this Ordinance shall be maintained in accordance with the requirements of the Historic Preservation Ordinance and all applicable City codes. Sec. 30-55. Alteration or destruction of property; recapture of taxes for non- compliance. (a) During the exemption period, if the City Manager or his designee, or the Historic Preservation Commission, have reason to believe that a structure receiving tax exemption pursuant to this Article has been altered or totally or partially destroyed without compliance with all applicable City codes and ordinances, or allowed to deteriorate 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 exemption pursuant to this Article has been totally or partially destroyed or altered without compliance with all applicable City codes and ordinances, or allowed to deteriorate by the willful act or negligence of the owner or his representative, then the tax e~emption agreement shall terminate, all exemption of taxes shall likewise terminate, and . the current 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%). This provision shall not apply to destruction or alterations that result from acts of God. -5- (b) 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 exemption authorized above shall constitute a covenant running with the land for the seven (7) year period provided in this Article. Likewise, any tax exemption approved in accordance with this ordinance shall apply for future owners of the affected property for the remainder of the seven (7) year term, 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 such seven (7) year period, the exemption 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 exemption and shall file an appropriate document in the Deed Records of Lamar County revoking the tax exemption. (c) In the event that the City or any other affected jurisdiction having granted a tax exemption hereunder determines that the applicant or owner is in default of any of the terms or conditions contained in the application, in the tax exemption agreement, or in this Article, then the affected jurisdiction shall give the applicant or current 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 exemption agreement shall terminate, all exemption of taxes shall likewise terminate, and the current 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%). (d) In every case of termination set forth above, any affected jurisdiction having granted the tax exemption may determine whether default has occurred by the applicant or owner in the terms and conditions of the application, the tax exemption agreement, or this Article, and shall so notify all other affected jurisdictions. Termination of the tax exemption agreement by any affected jurisdiction shall constitute simultaneous termination of all tax exemption 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. S~ction 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. -6- 'PASSED AND APPROVED this the 18th day of No v ATTEST: .. ~Wnz Slrerian Dixon, Assistant City Clerk APPROVED AS TO FORM: -7-