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22 - REINVESTMENT ZONEItem No. 22 memorandum TO: Mayor & City Council FROM: John Godwin, City Manager SUBJECT: REINVESTMENT ZONE DATE: January 2, 2015 BACKGROUND: At the December 8 council meeting, the council agreed that having a policy to provide consistent guidelines for creation of reinvestment zones would be very important moving forward. We want to maintain the flexibility to consider each economic development project on its own merits, and potentially negotiate certain details, but it is important that we start all such projects on an equal basis in order to be fair, equitable, and consistent in all of our dealings. STATUS OF ISSUE: The attached policy is consistent with existing state law and other economic development policies adopted by the city council in 2014. It should provide the predictability and consistency that are important to the public and to the development community alike. BUDGET: NA. RECOMMENDATION: Approve attached policy. City of Paris Reinvestment Zone Policy General Purpose and Objectives The City of Paris is committed to the promotion and retention of high quality development in all parts of the city as part of an overall effort to improve the quality of life for its residents. Since this purpose can be served, in part, by the expansion of its commercial business, retail, and mixed use base, the City of Paris will give consideration to the creation of reinvestment zones in order to make certain developable properties eligible for ad valorem tax abatements consistent with relevant state statutes and local ordinances. It is the policy of the City of Paris that consideration will be provided in accordance with the criteria set forth in this document. Nothing within this policy shall imply or suggest that the City of Paris is under any obligation to create reinvestment zones or provide tax abatements to any property. All properties shall be evaluated on a case -by -case basis. Applicability This Reinvest Zone Policy establishes guidelines and criteria for the creation of reinvestment zones for the purpose of entering into economic development agreements for possible tax abatements, under the provisions of Chapter 312 of the Texas Tax Code, and other economic grants, loans, or incentives as authorized by Chapter 380 of the Texas Local Government Code, the Development Corporation Act; Article 5190.6, Tex. Rev. Civ. Stat.; Article III, Section 52 -a of the Texas Constitution; and other applicable laws. Reinvestment Zones Section I. Criteria A. Any property to be considered for designation as a reinvestment zone shall be reviewed and approved or disapproved by the Paris City Council. In the review process, the council will, if applicable, consider the recommendations of the Paris Economic Development Corporation. In general, creation of the zone will be considered based upon the following: • The value added to the community by the proposed project; • The sustainability of the project; and • The likelihood of the development of the proposed project without tax abatements and /or other incentives. B. Specific considerations for approving reinvestment zones will be based upon the degree to which the proposed project: • Furthers the goals and objectives of the community as expressed in its comprehensive plan, master land use plan, and zoning ordinances; the master parks, recreation & open space plan; the Cox Field Planned Development District ordinance; the Lake Crook Planned Development District ordinance; the downtown redevelopment plan; any and all other adopted economic development plans and policies of the city and the PEDC; and any extant city infrastructure development plans and programs; • Impacts the city's costs and ability to provide existing and expanded municipal services; • Impacts the local environment, housing market, and available infrastructure; • Offers potential for long -term payback in tax revenues for the city's participation; and • Likely stimulates other desirable economic development within the city. C. To be designated as a reinvestment zone, an area must: • Be reasonably likely as a result of the designation to contribute to the retention or expansion of primary employment or to attract major investment in the zone that would be a benefit to the property and that would contribute to the economic development of the city; or • Be predominantly open and, because of obsolete platting, deterioration of structures or site improvements, or other factors, substantially impair or arrest the sound growth of Paris; or • Substantially impair the city's sound growth due to a substantial number of substandard, slum, deteriorated, or deteriorating structures; the predominance of defective or inadequate streets; faulty size, adequacy, accessibility, or usefulness of lots; unsanitary or unsafe conditions; the deterioration of site or other improvements; conditions that endanger life or property; or • Encompass signs, billboards, or other outdoor advertising structures designated by the Paris City Council municipality for relocation, reconstruction, or removal for the purpose of enhancing the physical environment of the city; or • Be located entirely in an area that meets the requirements for federal assistance under Section 119 of the Housing and Community Development Act of 1974; and • Fully comply with Sec. 312.202. "CRITERIA FOR REINVESTMENT ZONE ", of Chapter 312 of the Texas Tax Code. Section II. Development Agreements It shall be the goal of the city to enter into a tax abatement agreement and /or a separate development agreement covering properties designated as reinvestment zones. Such agreements shall be consistent with other adopted policies and applicable ordinances of the City of Paris. It shall be the goal of the city to negotiate said agreements as creatively as possible, such that: • Each development shall pay for itself. • The city shall receive, whenever feasible, direct, in -kind benefits from the developer that are designed to enhance Paris's quality of life. • Little or no funds are expended by the city in advance of development, but rather the develop- ment is funded from future returns on investment. • The provision of wet utilities are specifically provided and /or planned for. • Likely traffic pattern and traffic count changes are analyzed and accommodated so that no undue detriment to public safety results from the development.