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HomeMy WebLinkAboutResolution - 2011-R0027 - Notice Of Intent To Enter Tax Abatement Agreement - Cecllco Partnership/Verizon - 01/13/2011Resolution No. 2011-R0027 January 13, 2011 Item No. 5.25 RESOLUTION WHEREAS, the City Council has determined to give notice of its intent to enter into a Tax Abatement Agreement with Cellco Partnership d/b/a Verizon Wireless and Affiliates; and WHEREAS, V.T.C.A. Tax Code Section 312.2041 requires notice of intent of the City Council to be given to the presiding officer of the governing body of each taxing unit in which the property to be subject to the Tax Abatement Agreement is located; NOW BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the City Secretary give notice as set forth in Exhibit "A" of the intention of the City Council to enter into a Tax Abatement Agreement with Cellco Partnership d/b/a Verizon Wireless and Affiliates, said notice to be given to the presiding officers of each governing body of each taxing unit having jurisdiction in assessing taxes on the property located at 1415 Lubbock Business Park Blvd. which is further described as Lot 9, Lubbock Business Park, City of Lubbock, Lubbock County, Texas. Passed by the City Council on January 13 , 2011. APP OVEN A - O CONTENT: Rob >son, Assistant ity Manager Development Services APPROVED AS TO FORM: Linda L. Chamales Economic Development Attorney Lc: cityatt/Linda/ res -Notice of Intent Verizon Wireless December 10, 2010 TOM MARTIN, MAYOR Resolution No. 2011-R0027 EXHIBIT "A" NOTICE OF INTENT OF THE CITY COUNCIL OF THE CITY OF LUBBOCK TO ENTER INTO AN AGREEMENT TO ABATE TAXES ON REAL PROPERTY IMPROVEMENTS LOCATED AT 1415 LUBBOCK BUSINESS PARK BLVD., WHICH IS FURTHER DESCRIBED AS LOT 9, LUBBOCK BUSINESS PARK, CITY OF LUBBOCK, LUBBOCK COUNTY, TEXAS. Notice is hereby given that the City Council of the City of Lubbock intends to enter into an Agreement with Cellco Partnership d/b/a Verizon Wireless and Affiliates to abate taxes on improvements to real property located within Enterprise Zone 1.0-4 created by Ordinance No. 2007-00116 and covering all of the subject property. Notice is further given that the City Council of the City of Lubbock will consider authorizing the Mayor of the City to execute a contract between Cellco Partnership d/b/a Verizon Wireless and Affiliates for tax abatement, a draft copy of said Agreement is attached to this notice as Exhibit "A-1" and made a part hereof for all purposes. Notice is further given that the City Council will consider this matter at its meeting held in the City Council Chamber, City Hall, 1625 13`h Street, City of Lubbock, on the 13`h day of January, 2011, at approximately 9:30 o'clock a.m. AGREEMENT STATE OF TEXAS § COUNTY OF LUBBOCK § Resolution No. 2011-R0027 This Agreement is between the City of Lubbock, Texas, a home rule municipality of the State of Texas (hereinafter called "City"), and Cellco Partnership d/b/a Verizon Wireless and Affiliates (hereinafter called "Company"); WITNESSETH: WHEREAS, City received an application for tax abatement, attached as Exhibit "A," from Company on the 6th day of October 2010, for improvements to real property located at 1415 Lubbock Business Park Blvd., which is further described as Lot 9, Lubbock Business Park, City of Lubbock, Lubbock County, Texas; and WHEREAS, upon review of the above application it was determined that the facility and real property is located in Enterprise Zone 1.0-4 designated by the City for commercial and industrial tax abatement in Ordinance No. 2007-00116 covering the above described property; and WHEREAS, the Guidelines and Criteria Governing Tax Abatement For Commercial Projects in Designated Enterprise Zones in the City of Lubbock were adopted October 20, 2009 by Resolution No. 2009-RO444 of the City Council of the City of Lubbock. A copy of the Guidelines and Criteria Governing Tax Abatement for Commercial Projects in Designated Enterprise Zones in the City of Lubbock is attached as Exhibit "B" and incorporated herein as if fully set forth; and WHEREAS, the City complied with all the requirements set forth in V.T.C.A., Tax Code, Section 312.201; and WHEREAS, the City complied with all the criteria and guidelines as set forth in the Guidelines and Criteria Governing Tax Abatement for Commercial Projects in Designated Enterprise Zones in the City of Lubbock; and WHEREAS, the property described above is located in Enterprise Zone 1.0-4 and V.A.T.C., Tax Code, Sec. 312.2011 provides that designation as an enterprise zone constitutes designation as a reinvestment zone without further action; and WHEREAS, Company's application is for the construction of a new facility; and WHEREAS, V.T.C.A. Tax Code Sec. 312.002 and Section IV of the Guidelines and Criteria governing Tax Abatement for Commercial Projects in Designated Enterprise Zones in the City of Lubbock recognize construction of a new facility as being eligible for tax abatement status; and WHEREAS, the City Council hereby finds that all of the Guidelines and Criteria Governing Commercial Tax Abatement, as adopted by Resolution No. 2009-RO444 have been met by Company; and WHEREAS, the location of the facility and surrounding real property, which are to be the subject matter of this Agreement, are attached hereto as Exhibit "C" and made a part of this Agreement for all purposes; and NOW THEREFORE, for and in consideration of the premises and of the mutual terms, covenants and conditions herein contained the City and Company do hereby agree as follows: SECTION 1. Term. This Agreement shall commence January 1 of the tax year after the required improvements are substantially completed and shall expire five (5) years after said date. SECTION 2. Base Year. The base year applicable to real property, which is the subject of this Agreement, shall be 2011, and the assessed value of the real property shall be the assessed value applicable to such property for said year. SECTION 3. Base Year Taxes. The taxes upon the real property shall be paid in accordance with the assessed value of such property for the base year. Base year taxes upon the real property are thus not abated. SECTION 4. Abatement of Increase in Base Year Tax. In accordance with V.T.C.A., Tax Code, Section 312.204, real property taxes applicable to the real property subject to this Agreement shall be abated only to the extent said value for any given year within the term of this Agreement exceeds the base year taxes set forth above. SECTION 5. Property Ineligible for Tax Abatement. The property described and set forth in Section IV(5) of the Guidelines and Criteria Governing Tax Abatement for Commercial Projects in Designated Enterprise Zones in the City of Lubbock is incorporated by reference herein as if fully set out in this Agreement and fully describes the property ineligible for tax abatement. TAX ABATEMENT AGREEMENT Verizon Wireless PAGE 2 SECTION 6. Exemption from Tax. The City covenants and agrees to exempt from taxation, in accordance with Section 4 above, the following properties: (a) All proposed new improvements to be placed upon the property at 1415 Lubbock Business Park Blvd., which is further described as Lot 9, Lubbock Business Park, City of Lubbock, Lubbock County, Texas. (b) All eligible tangible personal property, owned by Company, placed in or upon the property set forth above and in Exhibit "A", which does not include any equipment and personal property owned by Company and already located in the existing facility. (c) It is further understood that all items affixed to the new improvements placed upon the real property identified above and in Exhibit "A", including machinery and equipment shall be considered part of the real property improvement and taxes thereon shall be abated in accordance with the provisions of subparagraph (a) above set forth. SECTION 7. Economic Qualifications. Company agrees to expend funds necessary to qualify for tax abatement by constructing a new facility, as set forth in Section IV(9)(a) of the Guidelines and Criteria Governing Tax Abatement for Commercial Projects in Designated Enterprise Zones in the City of Lubbock (Exhibit `B") on the property described above and in Exhibit "A". A description of the kind, number and location of all proposed improvements is attached in Company's application, Exhibit "A" and incorporated herein as if fully set forth. SECTION 8. Value of Improvements. In accordance with V.T.C.A., Tax Code, Section 312.204(a), which requires the Company of the property to make specific improvements or repairs to the property in order to be eligible for tax abatement, Company will expend ten million dollars ($10,000,000) for the construction of a new facility and thirty million dollars ($30,000,000) on tangible personal property over the first three years, to be located within the enterprise zone designated by Ordinance No. 2007-00116. Company agrees that if the initial tax appraisal on this property does not reflect a value equal to or exceeding ten million dollars ($10,000,000) for the real property improvements and thirty million dollars ($30,000,000) on tangible personal property, Company will provide invoices and proof of payment for the investment in the construction of the facility and the machinery and equipment located in the facility. SECTION 9. City Access to Property. Company covenants and agrees that City shall have access to the property, which is the subject matter of this TAX ABATEMENT AGREEMENT Verizon Wireless PAGE 3 Agreement, upon reasonable notice and during normal business hours, and that municipal employees or their agents shall be able to inspect the property to insure compliance with the terms and conditions of Company's application for tax abatement, attached as Exhibit "A", and this Agreement. SECTION 10. Portion of Tax Abated. City agrees, during the term of this Agreement, to abate taxes on eligible property according to the following schedule. Year 1: 100% Year 2: 80% Year 3: 60% Year 4: 40% Year 5: 20% SECTION 11. Type of Improvements. Company proposes to construct a new facility as described in Exhibit "A". Company further states that the proposed improvements to the property above mentioned will commence on February 1, 2011, and shall be completed by February 1, 2012. Company may request an extension of the above date from City in the event circumstances beyond the control of Company necessitate additional time for completion of such improvements and such consent shall not unreasonably be withheld. Company shall provide a copy of the certificate of occupancy or other proof of completion within ten days of completion of improvements. SECTION 12. Limitation on Use. Company agrees to limit the use of the property set forth above and in Exhibit "A" to commercial and/or industrial uses as those terms are defined in the zoning ordinances of the City of Lubbock and to limit the uses of the property to uses consistent with the general purpose of encouraging development of the enterprise zone during the term of this agreement. SECTION 13. Recapture. Company agrees to be bound by and comply with all the terms and provisions for recapture of abated taxes in the event of default by Company pursuant to law and as set forth in Guidelines and Criteria for Tax Abatement adopted by Resolution No. 2009-RO444 of the City Council of the City of Lubbock. SECTION 14. Certification. Company agrees to certify annually in writing to the governing body of each taxing unit that Company is in compliance with the terms of the Agreement. SECTION 15. Transfer of Property. Company acknowledges that the purpose of tax abatement is to increase the City of Lubbock tax base, and Company therefore agrees that if the property described above and in Exhibit TAX ABATEMENT AGREEMENT Verizon Wireless PAGE 4 "A" is sold or transferred during the term of the tax abatement agreement to any entity that is not required to pay property taxes for this property, Company agrees to reimburse the taxing jurisdictions for any tax abatement that was received on the property during the term of the agreement and to make a payment in lieu of taxes in an amount equal to the taxes that would have been due to the jurisdictions for each year remaining in this Agreement. SECTION 16. Compliance. The City may cancel or modify this Agreement if Company fails to comply with the Agreement. SECTION 17. Notices. Notices required to be given by this Agreement shall be mailed, certified mail return receipt requested, to the following addresses: CITY OF LUBBOCK Assistant City Manager Development Services P.O. Box 2000 Lubbock, Texas 79457 Phone: 806-775-2110 VERIZON WIRELESS Joseph Greco, Staff VP -Tax 180 Washington Valley Rd. Bedminster, NJ 07921 Phone: 908-306-4308 SECTION 18. Effective Date. Notwithstanding anything contained herein to the contrary, this Agreement shall not be effective until such time as it has been finally passed and approved by the City Council of the City of Lubbock. EXECUTED on , 2011. CELLCO PARTNERSHIP, d/b/a CITY OF LUBBOCK VERIZON WIRELESS A Municipal Corporation Joseph Greco, Staff VP -Tax TOM MARTIN, MAYOR ATTEST: ATTEST: Rebecca Garza City Secretary TAX ABATEMENT AGREEMENT Verizon Wireless PAGE 5 APPROVED AS TO CONTENT Rob Allison, Assistant City Manager Development Services APPROVED AS TO FORM: Linda L. Chamales Economic Development Attorney APPROVED BY THE BOARD OF DIRECTORS FOR THE LUBBOCK BUSINESS PARK TAX INCREMENT FINANCING REINVESTMENT ZONE CHAIRMAN Lc: cityatt/Linda/ Tax Abatement Agmt— Verizon Wireless November 30, 2010 TAX ABATEMENT AGREEMENT Verizon Wireless PAGE 6