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HomeMy WebLinkAboutResolution - 2013-R0412 - Tax Abatement Agreement - Luma Properties I - 11_21_2013Resolution No. 2013-RO412 November 21, 2013 Item No. 5.5 RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to execute for and on behalf of the City of Lubbock a Tax Abatement Agreement with Luma Properties I, and all related documents. Said Agreement is attached hereto and incorporated in this Resolution as if fully set forth herein and shall be included in the minutes of the Council. Passed by the City Council on November 21 , 2013. GT- ,�Xt KOTMRTSON, MAYOR ATTEST: Rebec a Garza, City SecretaryNj I APPROVED AS TO CONTENT: Cheryl Brock, Executive Director of Budget APPROVED AS TO FORM: Linda L. Chamales, Economic Development Attorney LC: cityatt / Lindal Res -Tax Abatement Luma Properties I November 7, 2013 Resolution No. 2013-RO412 AGREEMENT STATE OF TEXAS § COUNTY OF LUBBOCK § This Agreement is between the City of Lubbock, Texas, a home rule municipality of the State of Texas (hereinafter called "City"), and Luma Properties I (hereinafter called "Company"); WITNESSETH: WHEREAS, City received an application for tax abatement, attached as Exhibit "A," from Company on the 18th day of April 2013, for improvements to real property located at 1625 University, which is further described as Lots 24 and 25 less the north 0.6 feet thereof, Block 2, Hankins Addition to the 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, Census Tract 6.07, Block Group 2, 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 November 7, 2013 by Resolution No. 2013-RO371 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 Census Tract 6.07, Block Group 2 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 modernization/renovation of an existing 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 modernization/renovation of an existing 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. 2013-RO371 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 at least 90 percent 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 2013, 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. Taxes on the base year value 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 value set forth above. SECTION 5. Propei1y 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 TAX ABATEMENT AGREEMENT Luma Properties I PAGE 2 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. 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 1625 Broadway, which is further described as Lots 24 and 25, less the North 0.6 feet thereof, Block 2, Hankins Addition, City of Lubbock, Lubbock County, Texas. SECTION 7. Economic Qualifications. Company agrees to expend funds necessary to qualify for tax abatement by modernizing and renovating an existing 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 one hundred and nine thousand dollars ($109,000) for the modernization/renovation of an existing facility. Company agrees that if the initial tax appraisal on this property does not reflect a value equal to, or exceeding two hundred thirty two thousand thirty-eight dollars ($232,038) for the real property improvements, Company will provide invoices and proof of payment for the investment in the modernization/renovation of the existing 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 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% TAX ABATEMENT AGREEMENT Luma Properties I PAGE 3 Year 2: 80% Year 3: 60% Year 4: 40% Year 5: 20% SECTION 11. Type of Improvements. Company proposes to modernize/renovate existing facility as described in Exhibit "A". Company further states that the proposed improvements to the property above mentioned will commence on May 1, 2013 and shall be completed by July 1, 2013. 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 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. 2013-RO371 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 "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. TAX ABATEMENT AGREEMENT Luma Properties I PAGE 4 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 City Manager P.O. Box 2000 Lubbock, Texas 79457 Phone: 806-775-2016 LUMA PROPERTIES I Tim Khater, General Partner 5109 80`h Street Lubbock, Texas 79424 Phone: 806-441-5575 TAX ABATEMENT AGREEMENT Luma Properties 1 PAGE 5 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 November 21 LUMA P RTIES I Tim KUter General Partner ATTEST: Lc: cttyatt/Linda/ Tax Abatement Agmt - Luma Properties October 21, 2013 , 2013. UBBOCK CITY OF L Ale GLE . R066RTSON, MAYOR ATTEST: Reb eca Garza City Secretary APPROVED AS TO CONTENT Cheryl Brock, Executive Director of Budget APPROVED AS TO FORM: Linda L. Chamales Economic Development Attorney TAX ABATEMENT AGREEMENT Luma Properties I PAGE 6 lubboof ck T I X A S Exhibit "A" City of Lubbock Application for Commercial Tax Abatement This application should be filed prior to the beginning of construction or the purchase of equipment. If applying for a tax abatement in a jurisdiction other than City of Lubbock, a separate application must be completed for all other taxing jurisdictions. This application will become part of the Tax Abatement Agreement and any knowingly false representations wil I be grounds for the voiding of the agreement. An original copy of this request should be submitted to Mrs. Cheryl Brock, Capital Program Manager, Finance Department, City of Lubbock, 1625 130' Street, 2"d Floor, Lubbock, TX 79401. Par* T - AnnlirantTnfnrma#inn Annlioafinn nafa ('mm�anv M.... GJ "61 Prot) Ad l r5 S Telephone: Lot — yy/ r SS 9 Annual Sales: # 10q 000 Mailing Address: Sloby ❑ Corporation )!� Partnership Physical Address: a /99 00A 5-�) (11�1 7A- !`ry?y Current Number of Employees: 0 Employees in City Limits: Years in Lubbock: ❑ Proprietorship AJllq S, Attaclunent 1: Attach a description of the Applicant Company, including a brief histw)� corporate structure, business plan, and annual statement, if available. Part II - Project Information Location Address: /62 S Un tl/etTt]z Zipcode: ig 1/0 School District: L' -AVI- r �s Legal Description: hahIf, h5 8 / k I C zyf 2s- IV,b Attachment 1: Attach site map showing project location and showing proposed construction if applicable Project Description: ❑ New Construction ❑ Expansion eModernization Attachment 3: Attach statement fully explaining project, describe existing site and improvements, describe all proposed improvements and provide list of improvements and equipment for which abatement is requested, and list of any tangible personal property presently existing on the Real Property if it is an existing facility. Is the site located in an Enterprise Zone? iD<Yes ❑ No Section A — Facility Information Type of Facility/abatement: X Retail ❑ Service + ❑ Office Describe product or service to be provided: 0--e's +01 (Ar`, h r Cal ` fir Commercial Tax Abatement Application Page I Is the company applying for tax abatement: ' New Company to Lubbock X Existing Company The project meets one of the criteria in the Guidelines and Criteria Governing Tax Abatement for Commercial Projects in Designated Enterprise Zones, Section IV. 9. g Yes No Section B - Base Year Value Attach a statement of the assessed value of the Real Property, Facility, or existing facility for the base year from the Lubbock Central Appraisal District. Attachment 4 - Lubbock Central Appraisal District Assessed Value Section C - Variance Is the applicant seeking a variance? ❑ Yes No If "yes," attach letter requesting and justifying the variance, with supplemental information. PART III - ECONOMIC INFORMATION Construction Estimate: Start Date: �/ 13 Contract Amount: _ Completion Date: % % 2 013 Peak Construction Jobs Modernization: Estimated current economic life of structure Added economic life from modernization Permanent Job Creation/Retention: /c2%, S7-9 1 years years �v Current employment: Jobs to be Retained: Jobs created at opening: S^�O By year 20 3 If existing facility, what is the current plant payroll: $ Estimated amount of new payroll: $ /sU - 3 00 Estimated Appraised Value On Site Land Improvements Personal Property Value on January 1 preceding abatement 7 J 3 �' 2-3 O -s Estimated value of new abatable improvements NA Estimated value of properties not subject to abatement N//j 0 Estimated value of property after improvements ' S3 Z 23 2 L U �( O Commercial Tax Abatement Application Page 2 Do you certify that this business (including any branch, division, or department of thi business) does not currently, and will not knowingly in the future, employ an undocumented worker7Yes ❑ No Company Representative to be Contacted: Name Title go Address G k -2q�l z� Address fifKf6Z. 0 ,,✓�x' e0 0OkI l e-mail Authorized Signatur� r A Ae�— Name & Title 01-1 Phone Number e-mail Commercial Tax Abatement Application Page 3 ��� Luma Properies I is a local Lubbock company, 50% owned by the Timothy Khater family, and 50% owned by the Lama Shoukfeh family. It has been in existence for approximately 5 years. Currently, it invests in local properties, and owns a Lubbock commercial and apartment building. It's business plan is to continue to invest in local Lubbock real estate. Currently, it has purchased the former "Great Wall" restaurant, and plans on renovating the property and locating a commercial tenant. LUBBOCK COL'NTY, TEXAS LOTS 24 and 25. less the North 0.6 feet thereof, BLOCK 2 HANKINS ADDITION to the City of Lubbock, Lubbock County, Texas, according to the map, plat and/or dedication deed thereof recorded in Volume 86, Page 151, Deed Records of Lubbock County, Texas 1625 University Avenue EAST - WEST 130.00' ASPHAL T PAVED t LOT 25, LESS THE c 3 NORTH 0.6' THEREOF c m AV MCF5 A r rae o`srmer t� r w LM r ]STORY01 o CONCRETE BLOCK BUILDING ,� N BRICK AND FRAME TRIM = s 1- tc.r tttaor4 tsmcn 01 w. ASPHAL T PAVED A LOT 24 p l w SCALE : I"=20' CONTROL MONUMENTS AS FOUND Br SHOWN FENCES AS SHOWN. o - FD. /B' R <- FD. ' fRROWAS FOOT" CUT IN CONCRETE ® CUT ' X' IN CONCRETE oil - UTILITY POLE 120627 / SLG (SW) CERTIFICATION TO Wang Li ONLY 1, Brent Carroll, Terri Registered Professional Land Surveyor No. 5410, do hereby certify that this survey was made on the ground. A determination as to whether this property lies within a special flood hazard area was not made for this survey. June 7, 2012 Brent Carroll Registered Professional Land Surveyor No. 5410 State of Texas 16.7' Proj: Great Wall Bldg Area. 2,875 sf Loc. Lubbock, TX Site Area: 0 sf 0 Acres T E I N E RT Owner. Dr. Mater Schedule: a VA Arch: MLS Subcontractor Estimator: CH Date: 26-Mar-13 Bond Rate. 1.50% Code Description Subcontractor/Vendor Subs Malt's Cabor Totil $/Sf 1 General Conditions 5,010 4,000 - ""- 3.13 _ 2 Permit City of Lubbock 719 7-19 0.25 3 Architect / Eng. Services 3,225 3{ 1.12 0 0.00 0 0.00 02200 Wood Demo Henley w/ RC 0 0.00 _ 0 0.00 03050 Concrete M 8 US 9,281 9,281 3.23 Lot Striping Flatliner 475 475 0.17 Patch Damaged Block 400 410 0.14 04200 Saw Cut Openings Lubbock Masonry 7,350 7,350 2.56 Misc. Metals Teinert 1,000 1,60 0.35 _ 05400 Steel Stud Framing Henley w/ RC 0 0.00 0•. 0.00 06100 Rough Carpentry Henley 9,500 3.30 0.00 h 07240 EIFS T&S 22,321 7.76 07700 Roof Patching J. Ferg 6,157 2.14 07900 Caulk and Sealants Teinert 500 200 0.24 0.00 08100 Steel Doors and Frames WBS Teinert 1,658 504+ 0.75 0.00 08400 Aluminum Store Front KK w/ windows 0.00 Windows KK 11.015 - A- 11 � _ 3.83 A 0 0.00 09250 Drywall Henley w/ RC _ 0 0.00 V 0.00 09900 Paint Budget 700 7T8 0.24 0 Q 0.00 16000 Electrical Lonestar 1,725 _ T.725 0.60 Fee/Mo.: $1,650 Add Check 73,868 7,168 4,704 29.82 % General Conditions 8.90% Percent Cost: 86.2% 8.4% 5.5% ox Cost Breakdown I cost / sf (MISC) LAB BURDEN 38.00% 38.00% 0.62 Bldrs. Risk _ $105 Sales Tax GRT 0 00% 0 0.00 Site _ $0 1 $0 00 Gen Liab _ $385 Sub Total 87,M 30.44 SummaryGreat Wall Facade_Recap_3-26-13 1 of 2 3/26/2013 2.07 PM Proj: Great Wall Bldg Area: 2,876 sf Loc: Lubbock, TX Site Area: 0 sf 0 Acres T E I N E RT Owner. Dr. Khater Schedule: 8 wk Arch: MLS Subcontractor Estimator: CH Date: 26-Mar-13 Bond Rate: 1.50% D• ..Labor OPL $0 B.R./G.L./OPL _ 0.17 23 4.59Buildin $109,571 $38.11P&PBod $2518Fee Totall 101,220 1 35.21 P & P Bond (Time Adjusted) none GIRT 8,350.68 Total Without Bond 169,571 Bld Amount r ar.2 c o No (�„� � 5 � � j Joe SummaryGreat Wall Facade_Recap 3-26-13 2 of 2 3/26/2013 2:07 PM 2013 R69121 A 04RGn M en f y P:L 06/12/2013 Page 1 of 1 Current owner Legal Description Exsmptiwts Market LUMA PROPERTIES I LTD (00163102) HANKINS BLK 2 L 24 & 25 LESS N.6' 200,570 5109 80TH ST LUBBOCK,TX 79424 Entities Assessed _ __ CLB, GLB, HSP, SLB, WHP 200,570 Sft- Adder HWligy Information_ 1625 UNIVERSITY AVE 2012 2011 2010 2009 LUBBOCK, TX 79401 Imp HS - $0 $0 $0 Imp NHS Land HS Land NHS $141.469 - $77 532 $137 261 $0 $39 000 $132,805 $0 $39 000 $132,230 $0 $39.000 Sales Date Volume Page Seller Name 08/15/2012 2012-33555 LI ZHENXING & WANG & ZHANG WE Ag Mkt - $0 $0 $0 O6/06/2007 2007-23154 CHUANG SHING NAN & Ag Use - $0 $0 $0 09/27/2000 6836 301 GREAT WALL RESTAURANT Tim Mkt - $0 $0 $0 Tim Use so $0 $0 HS Cap - - - Assessed $219.001 $176.261 $171,805 $171,230 BuUdfng Attributes Type Description C Commercial Area Improvements Year Built Eff Year Value $167,114 Construction Foundation Exterior Interior Roof Flooring MA MA - Main Area 2875 AP1 AP1 - Paving Asphalt 9850 1951 1980 1951 1980 $164,651 $2.463 HeatfAC Baths Fireplace Year Built Rooms Bedrooms 1951 Land Segments SPTB Description Area Market Ag Value F1 Commercial 12922.0000F 77,532 0 A #-01 U'1 / V Page 1 of 2 � Z W. R� TIE*iR Lubbock Central Appraisal District A .= Values displayed for 2013 are PRELINIINARI' and subject to change, Home , Property Detail Sheet (R69121) General Information History Plat Man T Datasheet News Bills Pay Taxes FAQ do� Forms Owner Information Searches Owner ID: 00163102 Owner Name: LUMA PROPERTIES I LTD • QuickRef ID Search Owner Address: 5109 80TH ST LUBBOCK,TX 79424 OSearch • Owner Property Address: 1625 UNIVERSITY AVE • Address Search LUBBOCK, TX 79401 • Advanced Search Parcel Information • Neighborhood Search Legal Description: HANKINS BLK 2 L 24 & 25 LESS N.6' Neighborhood: 0108( 0108 - City Of Lubbock ) Property Data Acreage: • Detail Sheet Cross Reference: R343200-00002-00160-000 Undivided Interest: • Dalasheet Exemption Codes: Entity Codes: CLB (City Of Lubbock) • Bills GLB (Lubbock County) Other HSP (Lubb Cnty Hospital) SLB (Lubbock ISD) • Online Protest Instructions WHP (Hi Plains Water) Deed Type: Warranty Deed • Employment Deed Book: • Taxpayer Remedies Deed Page: 2012-33555 Map Page: 589 • Property Tax Administration Links: • Property Tax Basics Values Breakdown 2013 Preliminary Value • Property Tax Basics Spanish Land HS: $0,0 + • Exemption Table Land NHS: Improvement HS: $77,532 + $0.0 + • Texas Property Tax ExempiNsr vement NHS: $123,038 + Ag Market: $0.0 • Homestead Exemption Information Ag Use: $0.0 + Timber Market: $0 • Exemption Application Provisions Timber Use: $0 + • Property Tax Assistance Division Assessed: $200,570 • Public Information Act Improvements • Property Tax Code ID Type SPTB Segs Value Imp1 C (Commercial) F1 (F1 - Real Commercial) 2 $ 167,114 • GIS Maps • Low Income Housing Land • 2012 Tax Rates ID Type SPTB Acres Market • Public Info & Assistance Land1 C (Commercial) F1 (F1 - Real Commercial) $ 77,532 • Property Tax Calendar % t 1 A recent version of Adobe Acrobat Reader is required to view PDF Reader documents. Acrobat Reader is a free program available here. • Reports http://lubbockcad.org/Appraisal/PublicAccess/PropertyDetail.aspx?PropertyI D=855561 &d... 6/12/2013 Exhibit "B" City of Lubbock, TX Guidelines And Criteria Governing Tax Abatement For Commercial Projects In Designated Enterprise Zones In The City Of Lubbock SECTION I. General Purpose: The City of Lubbock (City) is committed to the promotion of high quality commercial development in designated Enterprise Zones within the City; and to an ongoing improvement in the quality of life for citizens residing in designated Enterprise Zones. The City recognizes that these objectives are generally served by enhancement and expansion of the local economy. The City will, on a case -by -case basis, give consideration to providing tax abatement, as authorized by V.T.C.A., Tax Code, Chapter 312, as stimulation for economic development within the designated Enterprise Zones in the City of Lubbock. It is the policy of the City that said consideration will be provided in accordance with the guidelines and criteria herein set forth and in conformity with the Tax Code. Nothing contained herein shall imply, suggest or be understood to mean that the City is under any obligation to provide tax abatement to any specific applicant (V.T.C.A. Tax Code, Section 312.002(d)). With the above rights reserved, all applicants for tax abatement will be considered on a case -by -case basis. SECTION II. Definitions: As used within these guidelines and criteria, the following words or phrases shall have the following meaning: 1. Abatement of Taxes: To exempt from ad valorem taxation all or part of the value of certain improvements placed on land located in a designated Enterprise Zone for commercial development purposes for a period of time not to exceed five (5) years. 2. Abatement Agreement: A contract between a property owner and the City for the abatement of taxes on qualified property located within a designated Enterprise Zone as authorized by V.T.C.A., Tax Code, Section 312.204(a). 3. Base Year Value: The assessed value of property eligible for tax abatement as of January 1 preceding the execution of a Tax Abatement Agreement as herein defined. 4. Commercial: Retail, service, or office 5. Designated Enterprise Zones: Enterprise zones in which the City will, on a case -by -case basis, give consideration to providing commercial tax abatement, as authorized by V.T.C.A., Tax Code, Chapter 312, as stimulation for economic development. The eligible designated Enterprise Zones are: Enterprise Zone Block Groups: Census Tract 2.01 Block Group 1 and 2 Census Tract 2.02 Block Group 1 Census Tract 3.01 Block Groups 1, 2, and 3 2013 Commercial Tax Abatement Guidelines November 7, 2013 Census Tract 3.02 Block Groups 1, 2, 4, and 5 Census Tract 6.07 Block Groups 1 and 2 Census Tract 9.00 Block Groups 1 and 4 Census Tract 10.00 Block Groups 1, 2, and 3 Census Tract 12.00 Block Groups 2 and 3 Census Tract 13.00 Block Groups 1, 2, and 3 Census Tract 14.00 Block Groups 1, 2, 3, 4, and 5 Census Tract 23.00 Block Groups 1 and 2 Census Tract 24.00 Block Groups 1, 3, 4, and 5 6. Expansion of Existing Facilities or Structures: The addition of buildings, structures, machinery or equipment to a Facility. 7. Existing Facility or Structure: A Facility as of the date of execution of the Tax Abatement Agreement, located in or on Real Property eligible for tax abatement. 8. Facility: The improvements made to Real Property eligible for tax abatement and including the building or structure erected on such Real Property and/or any Tangible Personal Property to be located in or on such property. 9. Improvements to Real Property or Improvements: Shall mean the construction, addition to, structural upgrading of, replacement of, or completion of any facility located upon, or to be located upon, Real Property, as herein defined, or any Tangible Personal Property placed in or on said Real Property. 10. Modern ization/Renovation of Existing facilities: The replacement or upgrading of existing facilities. 11. New Facility: The construction of a Facility that has not previously existed within the affected jurisdiction on previously undeveloped real property eligible for tax abatement. 12. New Permanent Job: A new employment position created by a business that has -provided employment to an employee of at least 1,820 hours annually and intended to be an employment position that exists during the life of the abatement. 13. Owner: The record title owner of Real Property or the legal owner of Tangible Personal Property. In the case of land leased from the City or buildings leased from a private party or tax exempt property, the lessee shall be deemed the owner of such leased property together with all improvements and Tangible Personal Property located thereon. 14. Productive Life: The number of years a Facility is expected to be in service. 15. Real Property: Land on which Improvements are to be made or fixtures placed. 16. Tangible Personal Property: Any Personal Property, not otherwise defined herein, and which is necessary for the proper operation of any type of Facility. 2013 Commercial Tax Abatement Guidelines November 7, 2013 SECTION III. Intent of Criteria and Guidelines: The intent of the criteria and guidelines, as herein set forth, is to establish the minimum standards which an applicant for tax abatement must meet in order to be considered for such status by the City. SECTION IV. Criteria and Guidelines for Tax Abatement: Any type of Facility will be eligible for tax abatement consideration provided such Facility meets the following guidelines and criteria: I. A business must clearly add to the Lubbock economic base. Compliance with this criterion must show that if the company is qualifying on the jobs requirement that the jobs being proposed will not simply displace other similar jobs in the community. 2. Creation of new value: Abatement may only be granted for the additional value resulting from any of the following: (a) modem ization/renovation of existing facilities of any type as herein defined. (b) construction of a new facility of any type as herein defined. (c) expansion of existing facilities of any type as herein defined. 3. New or existing facilities, of any type herein defined, located in a designated Enterprise Zone, (Designated Enterprise Zones are automatic Reinvestment Zones) or upon Real Property eligible for such status will be eligible for consideration for tax abatement status provided all other criteria or guidelines are satisfied. 4. Improvements to Real Property are eligible for tax abatement status. 5. The following types of property shall be ineligible for tax abatement status and shall be fully taxed: (a) Real Property; (b) inventories or supplies; (c) tools; (d) furnishings and other forms of movable personal property; (e) vehicles; (f) aircraft; (g) housing (single family and multi -family); 3 2013 Commercial Tax Abatement Guidelines November 7, 2013 (h) boats; (i) property owned by the State of Texas or any state agency; and, (j) property owned or leased by a member of the City Council that did not have an active tax abatement in place before they became a member of the governing body or commission. 6. In order for a Facility to qualify for abatement, the following conditions must apply: (a) The owner or leaseholder of Real Property must make eligible improvements to the Real Property; and, (b) In the case of lessees, the leaseholder must have a lease commitment of at least five (5) years. (c) Property must be properly zoned for the use stated by the owner in the application. 7. The amount and term of abatement shall be determined on a case -by -case basis, however, in no event shall taxes be abated for a term in excess of five (5) years. The amount of the taxable value of improvements to be abated and the term of the abatement shall be determined by the City in all cases. 8. No commercial property shall be eligible for tax abatement under these guidelines and criteria unless such property is located in a designated Enterprise Zone in accordance with Government Code, Chapter 2303.101, and as defined in Section II(5), and the tax abatement application is filed with the City before construction begins. 9. The minimum economic qualification for tax abatement shall be as follows: (a) $100,000 investment, or (b) Ten (10) new permanent jobs and at least 30% of the business' new employees in the zone are residents of any zone within the City. 10. Notwithstanding any of the requirements set forth in Section 9 above, the Lubbock City Council upon the affirmative vote of three -fourths (3/4) of its members may vary any of the above requirements when variation is demonstrated by the applicant for tax abatement that variation is in the best interest of the City to do so, and will enhance the economic development of the City. By way of example only, and not by limitation, the Lubbock City Council may consider the following or similar terms in determining whether a variance shall be granted: (a) That the increase in productivity of the Facility will be substantial and hence directly benefit the economy. (b) That the increase of goods or services produced by the Facility will be substantial, and directly benefit the economy. (c) That the employment maintained at the Facility will be increased. 2013 Commercial Tax Abatement Guidelines November 7, 2013 (d) That the waiver of the requirement will contribute, and provide for the retention of existing jobs within the City. (e) Any other evidence tending to show a direct economic benefit to the City. 11. Taxability: (a) The portion of the value of improvements to be abated shall be abated in accordance with the terms and provisions of a Tax Abatement Agreement executed between the City and the owner of the Real Property and/or Tangible Personal Property, (which agreement shall be) in accord with the provisions of V.T.C.A., Tax Code, Section 312.205. (b) All ineligible property, if otherwise taxable as herein described, shall be fully taxed. 12. The Lubbock City Council shall have total discretion as to whether tax abatement is to be granted. Such discretion, as herein retained, shall be exercised on a case -by -case basis. The adoption of these guidelines and criteria by the Lubbock City Council does not: (a) Limit the discretion of the Lubbock City Council to decide whether to enter into a specific Tax Abatement Agreement; (b) Limit the discretion of the Lubbock City Council to delegate to its employees the authority to determine whether or not the Lubbock City Council should consider a particular application or request for tax abatement; or, (c) Create any property, contract, or other legal right in any person to have the Lubbock City Council consider or grant a specific application or request for tax abatement. 13. The burden to demonstrate that an application for tax abatement should be granted shall be upon the applicant. The City shall have full authority to request any additional information from the applicant that the Lubbock City Council deems necessary to assist it in considering such application. SECTION V. Tax Abatement Agreement: 1, The Tax Abatement Agreement may be executed between the owner and the City. A Tax Abatement Agreement shall: (a) Establish and set forth the Base Year assessed value of the property for which tax abatement is sought. (b) Provide that the taxes paid on the Base Year assessed value shall not be abated as a result of the execution of said Tax Abatement Agreement. (c) Provide that ineligible property as subscribed in Section IV(5) hereinabove shall be fully taxed. 5 2013 Commercial Tax Abatement Guidelines November 7, 2013 (d) Provide for the exemption of improvements in each year covered by the agreement, only to the extent the value of such improvements for each such year exceeds the value for the year in which the agreement is executed. (e) Fully describe and list the kind, number and location of all proposed improvements to be made in or on the Real Property. (f) Set forth the estimated value of all improvements to be made in or on the Real Property. (g) Clearly provide that tax abatement shall be granted only to the extent: (1) The improvements to Real Property increase the value of the Real Property for the year in which the Tax Abatement Agreement is executed; and, (2) That the Tangible Personal Property improvements to Real Property were not located on the Real Property prior to the execution of the Tax Abatement Agreement. (h) Provide for the portion of the value of the improvements to Real Property or improvements to be abated. This determination is to be made consistent with the provisions of Section IV(5) of these guidelines and criteria as hereinabove set forth. (i) Provide for the commencement date and the termination date. In no event shall the commencement date occur prior to 90 percent completion of the project (both Real and Personal property). In no event shall the termination date exceed a period of five (5) years from the commencement date. (j) Describe the type and proposed use of the improvements to Real Property or improvements including: (1) The type of facility. (2) Whether the improvements are for a new facility or renovation of a facility. (3) The nature of the construction, proposed time table of completion, a map or drawings of the improvements above mentioned. (4) The amount of investment and the commitment for the creation of new jobs. (5) A list containing the kind, number and location of all proposed improvements. (6) Any other information required by the City. (k) Provide a legal description of the Real Property upon which improvements are to be made. (l) Provide access to and authorize inspection of the Real Property or improvements by employees of the City, who have executed a Tax Abatement Agreement with owner to insure improvements are made according to the specifications and conditions of the Tax Abatement Agreement. M 2013 Commercial Tax Abatement Guidelines November 7, 2013 (m) Provide for the limitation of the uses of the Real Property or improvements consistent with the general purpose of encouraging development or redevelopment of the zone during the period covered by the Tax Abatement Agreement. (n) Provide for contractual obligations in the event of default by owner, violation of the terms or conditions by owner, recapturing property tax revenue in the event the owner defaults or otherwise fails to make improvements as provided in said Tax Abatement Agreement, and any other provision as may be required or authorized by State law. (o) Contain each term agreed to by the owner of the property. (p) Require the owner of the property to certify annually to the Lubbock City Council that the owner is in compliance with each applicable term of the agreement. (q) Provide that the Lubbock City Council may cancel or modify the agreement if the property owner fails to comply with the agreement. 2. Not later than the seventh day before the City (as required by V.T.C.A., Tax Code, Section 312.2041) enters into an agreement for tax abatement under V.T.C.A., Tax Code, Section 312.204, the Lubbock City Council or a designated officer or employee thereof shall deliver to the presiding officer of the governing body of each of the taxing units in which the property to be subject to the agreement is located, a written notice that the City intends to enter into the agreement. The notice must include a copy of the proposed Tax Abatement Agreement. 3. A notice, as above described in Section 2, is presumed delivered when placed in the mail, postage paid and properly addressed to the appropriate presiding officer. A notice properly addressed and sent by registered or certified mail for which a return receipt is received by the sender is considered to have been delivered to the addressee. 4. Failure to deliver the notice does not affect the validity of the agreement. SECTION VI. Application: 1. Any present owner of taxable commercial property located within the designated Enterprise Zone of the City of Lubbock may apply for tax abatement by filing an application with the City of Lubbock. 2. The application shall consist of a completed application form accompanied by: (a) A general description of the improvements to be undertaken. (b) A descriptive list of the improvements for which tax abatement is requested. (c) A list of the kind, number and location of all proposed improvements of the Real Property Facility of Existing Facility. (d) A map indicating the approximate location of improvements on the Real Property Facility or Existing Facility together with the location of any or all Existing Facilities located on the Real Property or Facility. 2013 Commercial Tax Abatement Guidelines November 7, 2013 (e) A list of any and all Tangible Personal Property presently existing on the Real Property or located in an existing facility. (f) A legal description of property. (g) Address of property. (h) A proposed time schedule for undertaking and completing the proposed improvements. (i) A general description stating whether the proposed improvements are in connection with: (1) the modernization of a facility (of any type herein defined); or, (2) construction of a new facility; or (3) expansion of a facility; or (4) any combination of the above. (j) A statement of the additional value to the Real Property or Facility as a result of the proposed improvements. (k) A statement of the assessed value of the Real Property, Facility or Existing Facility for the Base Year. (1) Information concerning the number of new jobs that will be created or information concerning the number of existing jobs to be retained as result of the improvements undertaken. (m) A statement certifying that the business, or a branch, division, or department of the business, does not and will not knowingly employ an undocumented worker. (n) Any other information which the City deems appropriate for evaluating the financial capacity of the applicant and compatibility of the proposed improvements with these guidelines and criteria. (o) Information that is provided to the City in connection with an application or request for tax abatement, and which describes the specific processes or business activity to be conducted or the equipment or other property to be located on the property for which tax abatement is sought is confidential and not subject to public disclosure until the Tax Abatement Agreement is executed. Information in the custody of the City after the agree- ment is executed is not confidential. (V.T.C.A., Tax Code, Section 312.003). (p) The City shall determine if the property described in said application is within a designated Enterprise Zone. If the City determines that the property described is not within a current Enterprise Zone, as defined in Section II(5), then they shall so notify the applicant and said application shall then be returned to the applicant. SECTION VII. Investment/Jobs Documentation 8 2013 Commercial Tax Abatement Guidelines November 7, 2013 1. The investment commitment in the Tax Abatement Agreement will be verified as follows: a. The City will request the value of the Real and Personal Property from the Lubbock Central Appraisal Value, and if the value minus the base year, meets the agreement commitment, it will serve as verification that the investment met the requirement in the agreement; or b. If the Lubbock Central Appraisal District value, minus the base year value, does not meet the investment commitment in the agreement, the Company will provide invoices documenting the actual investment to verify the investment met the investment commitment in the agreement. 2. Confirmation of the job creation requirement will be verified as follows: a. The company will provide the City with a copy of the State Employment report filed with the State of Texas for the quarter ending after the date in the contract that the jobs are required to be created. Job creation will be audited annually to assure retention of jobs. Each year during the City audit of Tax Abatement Agreements, the company will provide the City with the 0, quarter employment report filed with the State of Texas to confirm job retention. If the employment in the 4`h quarter report does not meet the requirement for retention of the created jobs, the City may request the quarterly reports for the I ", 2"d, and 3`d quarters of that audit year to determine compliance. 3. The City may request and the company shall promptly provide any additional information that the City deems necessary to confirm that the company is in compliance with the terms of the Tax Abatement Agreement. SECTION VIII. Default Options In the event that the applicant or owner has entered into a Tax Abatement Agreement to make improvements as defined in Section IV(2) above, but fails to undertake or complete such improvements; fails to create all or a portion of the new jobs provided by the Tax Abatement Agreement; or is in default of any of the terms or conditions contained in the Tax Abatement Agreement; then in such event the City shall give the applicant or owner sixty (60) days notice of such failure. The applicant or owner shall demonstrate to the satisfaction of the City that the applicant or owner has commenced to cure such failure within the sixty (60) days above mentioned. In the event the applicant or owner fails to demonstrate that he is taking affirmative action to cure his failure, the City shall have three options: (a) The City may renegotiate the Tax Abatement Agreement with the applicant or owner in which case the current Guidelines and Criteria Governing Tax Abatement for Commercial Projects in Designated Enterprise Zones shall apply to the new Agreement; or (b) The City may determine that good cause exists to cancel the Tax Abatement Agreement and all abatement of taxes shall terminate immediately; or 2013 Commercial Tax Abatement Guidelines November 7, 2013 (c) The City may terminate the Tax Abatement Agreement and recapture taxes abated under Section IX, Recapture. 2. In any of the three options in Paragraph 1 above, the City shall 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. SECTION IX. Recapture In the event that any type of facility, is completed and begins producing goods or services, but subsequently discontinues producing goods or services for any reason, excepting fire, explosion or other casualty or accident or natural disaster or other event beyond the reasonable control of applicant or owner for a period of 180 days during the term of a Tax Abatement Agreement, then in such event the Tax Abatement Agreement shall terminate and all abatement of taxes shall likewise terminate. Taxes abated during the calendar year in which termination takes place shall be payable to the City by no later than January 3151 of the following year. Taxes abated in years prior to the year of termination shall be payable to the City within sixty (60) days of the date of termination. The burden shall be upon the applicant or owner to prove to the satisfaction of the City that the discontinuance of producing goods or services was as a result of fire, explosion, or other casualty or accident or natural disaster or other event beyond the control of applicant or owner. In the event the applicant or owner meets this burden, and the City is satisfied that the discontinuance of the production of goods or services was the result of events beyond the control of the applicant or owner, then such applicant or owner shall have a period of one year in which to resume the production of goods and services. In the event that the applicant or owner fails to resume the production of goods or services within one year, then the Tax Abatement Agreement shall terminate and the abatement of all taxes shall likewise terminate. Taxes abated during the calendar year in which termination takes place shall be payable to each affected jurisdiction by no later than January 3151 of the following year. Taxes abated in years prior to the year of termination shall be payable to the City within sixty (60) days of the date of termination. The one year time period, hereinabove mentioned, shall commence upon written notification from the City to the applicant or owner. 2. In the event that the applicant or owner has entered into a Tax Abatement Agreement to make improvements to a facility of any type described in Section 1 above, but fails to undertake or complete such improvements or fails to create all or a portion of the number of new jobs provided by the Tax Abatement Agreement, then in such event the City shall give the applicant or owner sixty (60) days notice of such failure. The applicant or owner shall demonstrate to the satisfaction of the City, above mentioned, that the applicant or owner has commenced to cure such failure within the sixty (60) days above mentioned. In the event that the applicant or owner fails to demonstrate that he is taking affirmative action to cure his failure, then in such event the Tax Abatement Agreement shall terminate and all abatement of taxes shall likewise terminate. Taxes abated during the calendar year in which termination takes place shall be payable to the City by no later than January 3 1 " of the following year. Taxes abated in years prior to the year of termination shall be payable to the City within sixty (60) days of the date of termination. 3. In the event that the City determines that the applicant or owner is in default of any of the terms or conditions contained in the Tax Abatement Agreement, then in such event the City 10 2013 Commercial Tax Abatement Guidelines November 7, 2013 shall give the applicant or owner sixty (60) days written notice to cure such default. In the event such default is not cured to the satisfaction of the City within the sixty (60) days notice period, then the Tax Abatement Agreement shall terminate and all abatement of taxes shall likewise terminate. Taxes abated during the calendar year in which termination takes place shall be payable to the City by no later than January 31` of the following year. Taxes abated in years prior to the year of termination shall be payable to the City within sixty (60) days of the date of termination. In the event that the applicant or owner allows ad valorem taxes on property ineligible for tax abatement owed to the City, to become delinquent and fails to timely and properly follow the legal procedures for their protest or contest, then in such event the Tax Abatement Agreement shall terminate and all abatement of taxes shall likewise terminate. Taxes abated during the calendar year in which termination, under this section takes place, shall be payable to the City by no later than January 3 1 " of the following year. Taxes abated in years prior to the year of termination shall be payable to the City within sixty (60) days of the date of termination. 5. In the event that the applicant or owner, who has executed a Tax Abatement Agreement with the City, relocates the business, for which tax abatement has been granted, to a location outside of the designated Reinvestment Zone, then in such event, the Tax Abatement Agreement shall terminate after sixty (60) days written notice by the City to the applicant or owner. Taxes abated during the calendar year in which termination, under this section takes place shall be payable to the City by no later than January 3 1 " of the following year. Taxes abated in years prior to the year of termination shall be payable to the City within sixty (60) days of the date of termination. 6. The date of termination as that term is used in this Section IX shall, in every instance, be the 60`h day after the day the City sends notice of default, in the mail to the address shown in the Tax Abatement Agreement to the applicant or owner. Should the default be cured by the applicant or owner within the sixty (60) day notice period, the applicant or owner shall be responsible for so advising the City and obtaining a release from the notice of default from the City, failing in which, the abatement remains terminated and the abated taxes must be paid. 7. In every case of termination set forth in Paragraphs 1, 2, 3, 4, and 5 above, the City shall determine whether default has occurred by applicant or owner in the terms and conditions of the Tax Abatement Agreement and shall so notify all other affected jurisdictions. 8. In the event that a Tax Abatement Agreement is terminated for any reason whatsoever, and taxes are not paid within the time period herein specified, then in such event, the provisions of V.T.C.A., Tax Code, Section 33.01 will apply. SECTION X. Miscellaneous: 1. Any notice required to be given by these criteria or guidelines shall be given in the following manner: (a) To the applicant or owner: written notice shall be sent to the address appearing on the Tax Abatement Agreement. 2013 Commercial Tax Abatement Guidelines November 7, 2013 (b) To the City: written notice shall be sent to the address appearing on the Tax Abatement Agreement. 2. The Chief Appraiser of the Lubbock Central Appraisal District shall annually assess the Real and Personal Property comprising the Reinvestment Zone. Each year, the applicant or owner receiving tax abatement shall furnish the Chief Appraiser with such information as may be necessary for the abatement. Once value has been established, the Chief Appraiser shall notify the City which levies taxes of the amount of assessment. 3. Upon the completion of improvements made to Facility as set forth in Section V(1) of these criteria and guidelines, a designated employee or employees of the City shall have access to the Facility to ensure compliance with the Tax Abatement Agreement. 4. A Tax Abatement Agreement may be assigned to a new owner, but only after written consent has been obtained from the City. 5. These guidelines and criteria are effective upon the effective date as adopted by the Lubbock City Council and shall remain in force for two years. At the end of the two-year term, these guidelines and criteria may be readopted, modified, amended or rewritten as the conditions may warrant. 6. Each affected jurisdiction shall determine whether or not said affected jurisdiction elects to become eligible to participate in tax abatement. In the event the affected jurisdiction elects by resolution to become eligible to participate in tax abatement, then such affected jurisdiction shall adopt guidelines and criteria by separate resolution forwarding a copy of both resolutions to all other affected jurisdictions. 7. These guidelines only apply to the City of Lubbock and any company wishing to apply for tax abatement from other taxing jurisdictions will need to contact the applicable taxing jurisdiction for their criteria and guidelines and requirements for applying for tax abatement. 8. In the event of a conflict between these guidelines and criteria and V.T.C.A., Tax Code, Chapter 312, then in such event, the Tax Code shall prevail, and these guidelines and criteria interpreted accordingly. 9. The guidelines and criteria, once adopted by the City, may be amended or repealed by a vote of three -fourths (3/4) of the members of the Lubbock City Council during the two-year term in which these guidelines and criteria are effective. 12 14 H&A., ivv+ _L LUBBOCK COUNTY, TEXAS LOTS 24 and 25, less the North 0.6 feet thereof. BLOCK 2 HANKINS ADDITION to the City of Lubbock, Lubbock County, Texas, according to the map. plat and/or dedication deed thereof recorded in Volume 86,1'oge 151, Deed Records of Lubbock County, Texas 1625 University Avenue EAST -WEST 130.00' ASPHAL T PAVED LOT 25, LESS THE a 3 NORTH 0.6' THEREOF v ito PUAEs A r rrtre a'smer �� soar hK.r H r ]STORY C CONCRETE BLOCK BUILDING rr r BRICK AND FRAME TRIM to = moan o.l' w ASPHAL T PA VED g LOT 24 p an<ha a.r � I roc a•'a� ti SCALE : 1"=20' CONTROL MONUMENTS AS FOUND far SHOWN FENCES AS r HOWN. 0- FD. �/B' RPD 4- FD. ' OW SS FOOT" CUT IN CONCRETE ®- CUT "X' IN CONCRETE Ow - UTILITY POLE 120627 / SLG (SW) CERTIFICATION TO: Wang Li ONLY 1, Brent Carroll, Texas Registered Professional Land Surveyor No. 5410, do hereby certify that this survey was made on the ground. A determination as to whether this property lies within a special flood hazard area was not made for this survey. Jtme 7, 2012 Brent Carroll Registered Professional Land Surveyor No. 5410 State of Texas m x 3 Cr J- n /63' 1