HomeMy WebLinkAboutResolution - 2013-R0390 - Notice Of Intent To Enter Tax Abatement Agreement With Luma Properties I - 11/07/2013Resolution No. 2013-RO390
November 7, 2013
Item No. 6.3
RESOLUTION
WHEREAS, the City Council has determined to give notice of its intent to enter into a
Tax Abatement Agreement with Luma Properties I; 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 Luma Properties I, 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 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.
Passed by the City Council on Nnypmbpr 7 , 201
C. ROBERTSON, MAYOR
ATFEST:
S� A6-1 � ""I,
Rebe a Garza, City Secre
APPROVED AS TO CONTENT:
0
Cheryl Brock,
Executive Director of Budget
APPROVED AS TO FORM:
Linda L. Chamales
Economic Development Attorney
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 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
Notice is hereby given that the City Council of the City of Lubbock intends to
enter into an Agreement with Luma Properties I to abate taxes on improvements to real
property located within 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 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 the City and
Luma Properties I 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 13th Street, City of
Lubbock, on the 21St day of November, 2013, at approximately 6:15 o'clock p.m.
EXHIBIT A-1
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, JBlock #2, r
ankins 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 JEnterprise Zone, Census Tract 6.07,
Block Group 2, designated Eby 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-RO_ 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 th Guidelines and
Criteria Governing Commercial Tax Abatement, as adopted by Resolution No.
2013-RO_ 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 AgKeement 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.
TAX ABATEMENT AGREEMENT Luma Properties I PAGE 2
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.
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�ddition, 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.
TAX ABATEMENT AGREEMENT Luma Properties I PAGE 3
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. dompany proposes to
modernize/renovate existing facility as described fin 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 o 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 provis'ons 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-RO 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
TAX ABATEMENT AGREEMENT Luma Properties I PAGE 4
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
City Manager
P.O. Box 2000
Lubbock, Texas 79457
Phone: 806-775-2016
LUMA PROPERTIES I
Tim Khater, General Partner ,f1�[! '1 IE► �(���
5109 80th Street
Lubbock, Texas 79424
Phone: 806-441-5575 f
(fill,�,,�
TAX ABATEMENT AGREEMENT Luma Properties I 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
LUMA PROPERTIES I
Tim Khater
General Partner
ATTEST:
2013.
CITY OF LUBBOCK
GLEN C. ROBERTSON, MAYOR
A,fill T yTEST:
Lc: cityatt/Linda/ Tax Abatement Agmt — Luma Properties
October 21, 2013
Rebecca 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