Part III Designated Zone

The city council hereby ordains and declares that upon designation of the proposed enterprise zone as an enterprise zone, the city may at its sole discretion provide the following incentives in the proposed enterprise zone, including tax incentives, which are not applicable throughout the city:

The city may, at its sole discretion, refund to any qualified business located in such enterprise zone the amount of tax paid under the Municipal Sales and Use Tax Act (Texas Tax Code, chapter 321) by the business and remitted to the comptroller of public accounts up to the maximum extent authorized by sections 2303.505 and 2303.506 of the act, and for a period determined by the city, but which shall not exceed five (5) years.

The city may provide a waiver of development fees to enterprise zone businesses meeting minimum standards.

The city may provide accelerated zoning and permit procedures. Enterprise zone businesses may be processed upon receipt, before non-enterprise zone businesses already in hand.

The city may provide a transfer of city-owned surplus land at below market prices for the public purpose of economic development. The ability to purchase city-owned land shall be based upon the extent to which the business receiving the property creates jobs for qualified employees, in accordance with section 11.05.154.

Other incentives may be provided by the city in the proposed enterprise zone upon its designation as an enterprise zone and throughout the city, including:

The city may abate taxes on the increase in value of real property improvements and eligible personal property. The level of abatement shall be based upon the extent to which the business receiving the abatement increases taxable value and creates jobs for qualified employees, in accordance with section 11.05.154.

The city may apply for training grants for new permanent jobs as available and appropriate to the industry.

§ 11.05.153 Local business incentive: Transfer of city-owned land.

The city may, at its sole discretion, provide other incentives allowable by state law chapter 2303 (The Texas Enterprise Zone Act).

(d)

The area described in this article is designated as an enterprise zone and a reinvestment zone, subject to the approval of the state department of economic development.

(e)

The city council directs and designates its mayor as the city’s authorized representative to act in all matters pertaining to the nomination and designation of the area described herein as an enterprise zone and a reinvestment zone.

(f)

The city council further directs and designates its city manager or his designee as liaison for communication with the state department of economic development to oversee zone activities and communications with qualified businesses.

(g)

Any and all financial incentives referred to within this document require approval by city council.

(Ordinance 3519, secs. 1–6, adopted 6/5/01; Ordinance 4131, secs. 1-6, 8, adopted 3/3/2009)

§ 11.05.152 Description.

For a 9.600 square mile tract of land within the city and its extraterritorial jurisdiction particularly described as follows:

Beginning at the intersection of Moffett Road and FM 842;

Thence north along the centerline of FM 842 to its intersection with County Road 122; Thence east and south along the centerline of County Road 122 to its intersection with State Highway 103 (Atkinson Drive);

Thence west along the centerline of State Highway 103 (Atkinson Drive) to its intersection with ]Paul Avenue;

Thence southwest along the centerline of Paul Avenue to its intersection with Loop 287 (Medford Drive);

Thence north along the centerline of Loop 287 (Medford Drive) to its intersection with Moffett Road;

Thence west along the centerline of Moffett Road to its intersection with Lowry Street;

Thence southwest along the centerline of Lowry Street to its intersection with Timberland Drive (U.S. 59);

Thence south along the centerline of Timberland Drive (U.S. 59) to its intersection with Kurth Drive (U.S. 69);

Thence north along the centerline of Kurth Drive (U.S. 69) to its intersection with North First Street;

Thence south along the centerline of North First Street to its intersection with Laurel Street; Thence east along the centerline of Laurel Street to its intersection with North Chestnut Street (FM 58);

Thence south along the centerline of North Chestnut Street (FM 58) to its intersection with Timberland Drive (U.S. 59);

Thence southwest along the centerline of Timberland Drive (U.S. 59) to its intersection with Third Street;

Thence north along the centerline of Third Street to its intersection with Denman Avenue; Thence northwest along the centerline of Denman Avenue to its intersection with Angelina Street;

Thence south along the eastern right-of-way of Angelina Street until it becomes Feagin Drive, and continuing south along the eastern right-of-way of Feagin Drive until it becomes FM 819 (College Drive), and continuing south along the eastern right-of-way line of FM 819 (College Drive) to a point opposite the southeast corner of the Southpark Industrial Subdivision;

Thence west along the southern property line of the subdivision for a distance of 2720.83 feet to a corner;

Thence northeast along the property line of the subdivision for a distance of 1100.26 feet to a corner;

Thence southeast along the property line of the subdivision for a distance of 417.59 feet to a corner;

Thence northwest along the property line of the subdivision for a distance of 216.32 feet to a corner;

Thence east along the northern property line of the subdivision for distance of 758.79 feet to the intersection of the subdivision with western right-of-way line of FM 819 (College Drive);

Thence north along the western right-of-way line of FM 819 (College Drive) until it becomes Feagin Drive, and continuing north along western right-of-way line of Feagin Drive until it becomes Angelina Street, and continuing north along the western right-of-way line of Angelina Street to its intersection with Abney Avenue;

Thence west along the centerline of Abney Avenue to its intersection with North Raguet Street; Thence north along the centerline of North Raguet Street to its intersection with the centerline of the Angelina & Neches River Railroad right-of-way;

Thence north along the centerline of the Angelina & Neches River Railroad right-of-way to its intersection with Hill Street;

Thence south along the centerline of Hill Street to its intersection with State Highway 94 (Frank Street);

Thence west along the centerline of State Highway 94 (Frank Street) to its intersection with the pipeline that establishes the boundary between Census Tract 3 and Census Tract 4;

Thence north along the census tract boundary to its intersection with FM 1194 (Lotus Lane);

Thence east along the centerline of FM 1194 (Lotus Lane) to its intersection with Hill Street; Thence north along the centerline of Hill Street to its intersection with North Raguet Street;

Thence west along the centerline of North Raguet Street to its intersection with Commerce Street;

Thence north along the centerline of Commerce Street to its intersection with Old Mill Road; Thence northwest along the centerline of Old Mill Road to its intersection with Loop 287 (North John Redditt Drive);

Thence north along the centerline of Loop 287 (North John Redditt Drive) to its intersection with U.S. 69;

Thence northwest along the right-of-way line of the ramp to U.S. 69 to its intersection with FM 2680;

Thence north along the centerline of FM 2680 to its intersection with County Road 89; Thence east along the centerline of County Road 89 to its intersection with FM 2251;

Thence south along the centerline of FM 2251 to its intersection with Loop 287 (Ellen Trout Drive);

Thence east along the centerline of Loop 287 (Ellen Trout Drive) to its intersection with Martin Luther King Jr. Drive;

Thence north along the centerline of Martin Luther King Jr. Drive to its intersection with a tributary of Mill Creek;

Thence north along the tributary of Mill Creek to its intersection with the city limit;

Thence east along the city limit line and following said city limit to its intersection with Davisville Road;

Thence south along the centerline of Davisville Road to its intersection with the northern right-of-way line of Loop 287 (North Medford Drive);

Thence southeast along the northern right-of-way line of Loop 287 (North Medford Drive) to its intersection with Moffett Road;

Thence east along the centerline of Moffett Road to its intersection with FM 842 and being the point of beginning and containing 9.6 square miles of land.

ENTERPRISE ZONE City of Lufkin

(Ordinance 3519, ex. A, adopted 6/5/01; Ordinance 4131, ex. A, adopted 3/3/2009)

(a)

Proposed incentive.

The city proposes the consideration of offering the transfer of city-owned land in the enterprise zone at below market prices for the public purpose of economic development.

(b)

Description of the incentive.

The city has agreed to consider the transfer of city-owned land located in the enterprise zone at below market prices. The ability to purchase city-owned land in the enterprise zone at below market value shall be based upon the extent to which the business receiving the property creates jobs for qualified employees, as shown below.

Economic development policy; objective requirements.

The business must create a minimum of five (5) new full-time jobs (or full-time equivalents, FTE’s) in the downtown Main-street area or the designated Kurth Drive redevelopment zone or ten (10) new full-time positions or FTE’s elsewhere in the enterprise zone under the industrial development guidelines, with a full-time equivalent (FTE) being defined as at least one thousand eight hundred twenty (1,820) hours annually. All permanent jobs must be created for a minimum of three (3) years to qualify; and

§ 11.05.154 Tax incentive policy statement.

Add at least fifty thousand dollars ($50,000) ad valorem value to the current ad valorem value in the designated downtown Main-Street area and Kurth Drive re-development area or one hundred thousand dollars ($100,000) ad valorem value to the current value of the property elsewhere in the enterprise zone.

(Ordinance 3519, ex. B, adopted 6/5/01; Ordinance 4131, ex. B, adopted 3/3/2009)

(a)

General purpose and objectives.

The city is committed to the promotion of high quality development in all parts of the city and to an ongoing improvement in the quality of life for its citizens. The city is also committed to the rehabilitation and revitalization of structures and areas of historic or economic importance, such as the downtown area. These objectives are generally served by the enhancement, expansion, and diversification of the local economy. The city council adopted a tax incentive policy on February 5, 2008 in cooperation with the Angelina College Tax District, Angelina County, Lufkin Independent School District, Lufkin Angelina County Economic Development Partnership, and the Angelina County Chamber of Commerce to assist in achieving these goals and objectives. The purpose of the tax incentive policy is to promote the retention and expansion of existing industry and to assist in attracting new business. According to state law, Property Redevelopment and Tax Abatement Act, chapter 312, Tax Code, Vernon’s Texas Civil Statutes, and chapter 380 of the Local Government Code, the city may grant tax abatement or provide incentives for economic development using general fund revenues (the rebate of ad valorem taxes) on the increment in value added to a particular property by a specific development proposal which meets the economic goals and objectives of the city. The tax abatement or tax incentive may apply to any portion of the real property or personal property value of the project. Tax incentives will not be ordinarily considered for projects which would be developed without such incentives unless it can be demonstrated that higher development standards or aesthetic improvements will be added, and/or other development and community goals will be achieved through the use of the incentive. Tax incentives are granted to the owners of improvements on real property. Projects which are developed involving leased real property shall be governed under special terms and conditions which may be set forth in the agreement governing each specific tax incentive.

Within the context of these goals, the city will, on a case-by-case basis, give consideration to providing incentives as a stimulus for economic development in the city. It is the policy of the city that said consideration will be provided in accordance with the procedures and criteria outlined in this document. Nothing herein shall imply or suggest that the city is under obligation to provide any incentive to any applicant. Moreover, nothing herein shall limit the discretion of the city to decide whether to enter into a specific tax-incentive agreement. All applicants shall be considered on a case-by-case basis.

(b)

Criteria for tax incentive.

Any request for tax incentives shall be reviewed by the city, the county, Angelina College tax district, and Lufkin Independent School District (where applicable by law), and except in the case of an approved variance as discussed below, the proposed project must conform to the general guidelines specified below:

Any request for tax incentives must involve a development project that will add at least ten (10) new full-time jobs and increase the current ad valorem value by an increment of at least one million dollars ($1,000,000) under the “economic development” policy; or increase the current ad valorem value by an increment of at least fifty thousand dollars ($50,000) and create five (5) new jobs under a downtown rehabilitation/revitalization policy or the Kurth Drive revitalization policy.

The project must make a substantial contribution to development efforts in the city by enhancing either additional development activity or furthering redevelopment and preservation activities within special planning areas such as the downtown area or in a special development zone of the city such as an enterprise zone.

The project must be aesthetically pleasing and improve the outward appearance of the property and area. Visual clutter must be screened in an appealing manner.

The project must be a quality project and an asset to the community in economic development, promotion of the city and area, and increasing good visual appearance of the community.

(E)

The project must be of a good, sound character that the city can be proud to have located in the community. It shall not be of such a nature that it promotes activities not traditionally accepted as moral or ethical.

(F)

The project must remain in good standing with environmental regulations and not create environmental concerns that are not readily addressable.

(G)

The project is in an area which might not otherwise be developed because of decay in area, shift in location trends away from the area, [or] some other reason that has caused development to be slow in the area.

(H)

The project has not been started and no construction has commenced at the time the application is approved.

(I)

The project cannot be a restaurant, retail establishment (wholesale and regional distribution facilities are eligible), or offices or similar type of activity under policy A “Economic Development” in subsection (c). However, such applications may be considered under both the downtown rehabilitation/revitalization and the Kurth Drive revitalization policies. Competition within the city should not be increased by the project. Any office project associated with a regional (over several counties in area), state, national, or international headquarters (a commanding center with several agencies, distribution points, etc. reporting to it) may be considered if it meets all the criteria under all of the sections of this policy.

Applications for tax incentives should provide a written narrative detailing how the project relates to the criteria established above. Architect’s drawings, elevations, and/or renderings may be required to show how some standards will be met. These drawings, elevations, and/or renderings would need to be accurate in color, facade changes, and landscaping plans.

(c)

Objective criteria for determining tax incentive and value of incentives.

The subjective criteria outlined in subsection (b) will be used to determine if it is in the best interests of the city, the county, Lufkin Independent School District (where applicable) and Angelina College to provide tax incentives to a particular applicant. To determine the amount abated or rebated on any increment in value added to the current ad valorem value of property, the following objective criteria must be met except in the case of an approved variance, as discussed below). There are two (2) policies which an applicant may consider. The applicant needs to apply for the policy which is most appropriate. The city council retains the right to make the final decision of the appropriateness of the policy chosen based upon the scope of the project and the intent of the policies. The objective criteria policies are as follows:

Policy A (economic development).

Objective requirements.

Minimum project requirements for consideration of incentives:

Project will locate in a desired development zone.

Project will fall within state and local environmental regulations.

Project meets minimum job creation for its type and zone.

Project provides wages of at least 101% of the county average for its type.

Project meets minimum investment for its type and zone.

Company has suitable financial stability.

Evaluation criteria.

Job creation.

15 points for every (FTE = 2,080 hrs per year) job at 101% of area average for type.

20 points for every (FTE = 2,080 hrs per year) job at 110% of area average for type.

25 points for every (FTE = 2,080 hrs per year) job at 120% of area average for type.

30 points for every (FTE = 2,080 hrs per year) job at 130% of area average for type.

35 points for every (FTE = 2,080 hrs per year) job at 140% of area average for type.

Investment.

20 points for every $100,000 increase in taxable value.

40 points for every $20,000.00 in new annual payroll created.

Other.

1 point for every hotel room night created per year.

10 points for every $1,000 in annual city sales tax generated.

1,000 bonus points if project going into a currently vacant or targeted facility.

1,500 bonus points if that facility is dilapidated or does not meet code.

1,000 bonus points if environmental issues will be abated by project.

1,000 bonus points if a currently operating business is expanding and creating at least 10 new [jobs].

Cannot be for retail (wholesale and regional distribution facilities are eligible), restaurants, or offices (unless a regional, state, national, or international headquarters).

Under policy A, it shall be the responsibility of the applicant to provide (on a yearly basis) documentation that verifies continued compliance with the minimum point totals on the qualification threshold point sheet. The city staff shall issue (on a yearly basis) a certificate of compliance according to the terms of the tax abatement agreement if the minimum point totals are met.

(iv)

In the event of an application involving an intra-city relocation, tax abatement eligibility shall be determined with regard to the net effect of the project. Proper adjustments to the point total shall be made depending on the effect the move will have on the previous site.

Industrial development schedules.

	SCHEDULE ED 1 ,000	SCHEDULE ED 2 ,000	SCHEDULE ED 3 8,000	SCHEDULE ED 4 16,000	SCHEDULE ED 5 32,000
YR. 1	100%	100%	100%	100%	100%
YR. 2	90%	90%	100%	100%	100%
YR. 3	80%	80%	90%	100%	100%
YR. 4	70%	70%	80%	90%	100%
YR. 5	60%	60%	70%	80%	90%
YR. 6	50%	50%	60%	70%	80%
YR. 7	40%	40%	50%	60%	70%
YR. 8	0	30%	40%	50%	60%
YR. 9	0	20%	30%	40%	50%
YR. 10	0	10%	20%	30%	40%

Policy B (Downtown Rehabilitation/Revitalization).

Objective requirements.

Must be in the designated downtown Main-street area.

Must make building improvements of at least $50,000 and add a minimum of $50,000 to current taxable value.

Rehabilitation is given preference over new construction.

(iv)

Must create a minimum of 5 new jobs.

Main Street development schedules.

Job creation.

15 points for every (FTE = 2,080 hrs per year) job at 101% of area average for type.

20 points for every (FTE = 2,080 hrs per year) job at 110% of area average for type.

25 points for every (FTE = 2,080 hrs per year) job at 120% of area average for type.

30 points for every (FTE = 2,080 hrs per year) job at 130% of area average for type.

35 points for every (FTE = 2,080 hrs per year) job at 140% of area average for type.

Investment.

20 points for every $50,000 increase in taxable value.

25 points for every $12,500.00 in new annual payroll created.

Other.

1 point for every hotel room night created per year.

10 points for every $1,000 in annual city sales tax generated.

1,000 bonus points if project going into a currently vacant or targeted facility.

1,500 bonus points if that facility is dilapidated or does not meet code.

1,000 bonus points if environmental issues will be cleared up by project.

1,000 bonus points if a currently operating business is expanding and creating at least jobs [sic].

For larger projects, the industrial incentive schedule may be applied if applicable.

YEAR AND AMOUNT OF IMPROVEMENTS ABATED
	SCHEDULE MS1 2,000 pts.	SCHEDULE MS2 3,000 pts.**	SCHEDULE MS3 5,000 pts.**
YR. 1	100	100%	100%
YR. 2	90	90%	100%
YR. 3	80	80%	90%
YR. 4	70	70%	80%
YR. 5	60	60%	70%
YR. 6	50	50%	60%
YR. 7	40	40%	50%
YR. 8		30%	40%
YR. 9		20%	30%
YR. 10		10%	20%

If an applicant is short of the required points and surpasses the criteria outlined in subsection (b), then the city, the county and Angelina College may grant a pro-rated abatement based on the schedule outlined above. If an applicant seeks an abatement under policy B (which states it must be in the downtown area) and the project is outside the downtown area, the city, the county and Angelina College may grant an abatement based on the schedule under policy B listed above if the city finds the needs of the area of the proposed project are the same or surpass the needs and attention the downtown area has.

(3)

Policy C (Kurth Drive Revitalization).

Objective requirements.

Must be located on land immediately adjacent to Kurth Drive with direct access onto Kurth Drive.

Must make building improvements of at least $50,000 and add a minimum of $50,000 to current taxable value.

Must create a minimum of 5 new jobs.

Kurth Drive development schedules.

Job creation.

15 points for every (FTE = 2,080 hrs per year) job at 101% of area average for type.

20 points for every (FTE = 2,080 hrs per year) job at 110% of area average for type.

25 points for every (FTE = 2,080 hrs per year) job at 120% of area average for type.

30 points for every (FTE = 2,080 hrs per year) job at 130% of area average for type.

35 points for every (FTE = 2,080 hrs per year) job at 140% of area average for type.

Investment.

20 points for every $50,000 increase in taxable value.

25 points for every $12,500.00 in new annual payroll created.

Other.

1 point for every hotel room night created per year.

10 points for every $1,000 in annual city sales tax generated.

1,000 bonus points if project going into a currently vacant or targeted facility.

1,500 bonus points if that facility is dilapidated or does not meet code.

1,000 bonus points if environmental issues will be cleared up by project.

1,000 bonus points if a currently operating business is expanding and creating at least jobs [sic].

For larger projects, the industrial incentive schedule may be applied if applicable.

YEAR AND AMOUNT OF IMPROVEMENTS ABATED
	SCHEDULE KD1 2,000 pts.	SCHEDULE KD2 3,000 pts.**	SCHEDULE KD3 5,000 pts. **
YR. 1	100	100%	100%
YR. 2	90	90%	100%
YR. 3	80	80%	90%
YR. 4	70	70%	80%
YR. 5	60	60%	70%
YR. 6	50	50%	60%
YR. 7	40	40%	50%
YR. 8		30%	40%
YR. 9		20%	30%
YR. 10		10%	20%

If an applicant is short of the required points and surpasses the criteria outlined in subsection (b), then the city, the county and Angelina College may grant a pro-rated abatement based on the schedule outlined above. If an applicant seeks an abatement under policy C (which states it must be located immediately adjacent to Kurth Drive with direct access onto Kurth Drive) and the project is outside the designated area, the city, the county and Angelina College may grant an abatement based on the schedule under policy C listed above if the city finds the needs of the area of the proposed project are the same or surpass the needs and attention the designated area has.

(d)

Variance.

In accordance with state law, Property Redevelopment and Tax Abatement Act, section 312.002, Tax Code, Vernon’s Texas Civil Statutes, this tax abatement policy statement shall not limit the discretion of the city to decide whether to enter into a specific tax abatement agreement. Accordingly, the city may enter into a particular tax abatement agreement whenever it determines that it is in the best interests of the city to enter into such agreement and provide such abatement with respect to a particular applicant. In doing so, the city may vary from the provisions of this tax incentive policy statement in any respect that is not contrary to state law, including but not limited to: (1) the criteria for granting the abatement; (2) the length of the abatement; and (3) the amount of the abatement. Any variance must be requested as a part of the written application and must be approved by a vote of three-fourths of the city council.

(e)

Procedural guidelines.

Any person, organization, or corporation desiring that the city consider providing tax abatement to encourage location or expansion of operations within the city limits shall be required to comply with the following procedural guidelines. Nothing within these guidelines shall imply or suggest that the city is under any obligation to provide any abatement to any applicant.

Preliminary application steps.

Applicant shall complete an “application for tax abatement” form.

Applicant shall address all criteria questions outlined in narrative format.

Applicant shall prepare a plat showing the precise location of the property, all roadways within 500 feet of the site and all existing zoning and land uses within 500 feet of the site.

A complete legal description of the property shall be provided if the property is described by metes and bounds.

(E)

Applicant shall complete all forms and information detailed in subsections (A) through (D) above and submit them to:

Director of Economic Development

P. O. Box 1606

Lufkin, Texas, 75902.

Application review steps.

All information in the application package detailed above will be reviewed for completeness and accuracy. Additional information may be requested as needed.

The application will be distributed to the appropriate departments for internal review and comments. Additional information may be requested as needed.

Copies of the complete application package and staff comments will be provided to the Lufkin Independent School District (where applicable), Angelina County Commissioner’s Court and Angelina College for review and comment.

Prior to final consideration, applicant may be required to provide a minimum of three (3) years of audited financials for review.

(3)

Consideration of the application.

The economic development office will meet with the superintendent’s office of the Lufkin Independent School District (if applicable), County Judge of Angelina County and President of Angelina College to consider the application. If needed, representatives of the taxing authorities will meet with the applicant.

Review of the project and staff recommendation will be presented at a called 4B economic development corporation board meeting and then a regular city council meeting.

The city council may consider a resolution calling for a public hearing to consider establishment of a tax reinvestment zone if the project area lies outside the established enterprise zone.

The city council may hold the public hearing and determine whether the project is feasible and practical and in the best interest to the land and to the community.

(E)

The city council may consider adoption of a resolution designating the area described in the legal description of the proposed project as a commercial/industrial tax abatement zone (if area lies outside of the adopted enterprise zone).

(f)

Adoption and execution of agreements.

Should the city council determine that it is in the best interests of the city to provide tax abatement to a particular applicant, a resolution shall be adopted declaring that, under the guidelines and criteria established herein, the applicant is eligible for abatement/rebate and the tax abatement district is established if necessary. The resolution shall further authorize the director of economic development to negotiate an agreement with the applicant governing the provision of the abatement.

Any agreement must include at least the following specific items:

General description of the project.

Amount of the tax abatement.

Method for determining the qualifications of meeting the criteria.

(iv)

Promise to meet and maintain the qualifications over the term of the agreement.

(v)

Duration of the abatement.

(vi)

Legal description of the property.

(vii)

Type, number, location and timetable of planned improvements.

(viii)

Agreement to allow city to inspect and audit records to substantiate meeting criteria of qualification.

The incentive program shall then be presented to city council for adoption, whereupon it shall be executed by the director of economic development and by the specified official of each participating taxing jurisdiction.