This chapter may be cited as the town economic development ordinance.
(Ordinance 15-03 adopted 2015)
This chapter is enacted pursuant to the express statutory authority
conferred upon municipalities to allow public support of economic
development.
(Ordinance 15-03 adopted 2015)
The purpose of this chapter is to allow public support of economic
development projects to foster, promote, and enhance local economic
development efforts while continuing to protect against the unauthorized
use of public money and other public resources. Further, the purpose
of this chapter is to allow the town to enter into one or more joint
power agreements with other local governments to plan and support
regional economic development projects.
(Ordinance 15-03 adopted 2015)
As used in this chapter:
Arts and cultural district.
A developed district of public and private uses that is created
pursuant to the Arts and Cultural District Act of the State of New
Mexico.
Cultural facility.
A facility that is owned by the state, a county, a municipality
or a qualifying entity that serves the public through preserving,
educating, and promoting the arts and culture of a particular locale,
including theaters, museums, libraries, galleries, cultural compounds,
educational organizations, performing arts venues and organizations,
fine arts organizations, studios and media laboratories and live-work
housing facilities.
Economic development contractor.
One or more individuals, corporations, associations, partnerships
or other legal entities with whom the town has entered into a written
agreement for recruitment of new businesses and job opportunities,
the expansion of existing business and industry, and other related
services to preserve, promote, diversify, and strengthen the business
and general economic base of the town and its environs.
Economic development project.
The provision of direct or indirect assistance to a qualifying
entity and includes the purchase, lease, grant, construction, reconstruction,
improvement or other acquisition or conveyance of land, buildings
or other infrastructure; public works improvements essential to the
location or expansion of a qualifying entity; payments for professional
services contracts necessary for local or regional governments to
implement a plan or project; the provision of direct loans or grants
for land, buildings or infrastructure; technical assistance to cultural
facilities; loan guarantees securing the cost of land, buildings or
infrastructure in an amount not to exceed the revenue that may be
derived from the municipal infrastructure gross receipts tax or the
county infrastructure gross receipts tax; grants for public works
infrastructure improvements essential to the location or expansion
of a qualifying entity; grants or subsidies to cultural facilities;
purchase of land for a publicly held industrial park or a publicly
owned cultural facility; and the construction of a building for use
by a qualifying entity.
Person.
An individual, corporation, association, partnership or other
legal entity.
Project participation agreement.
An agreement between a qualifying entity and the town whereby
the town provides assistance to an economic development project in
exchange for the benefits received as set forth in this chapter.
Qualifying entity.
A corporation, limited liability company, partnership, joint
venture, syndicate, association or other person that is one or a combination
of two (2) or more of the following:
A.
An industry for the manufacturing, processing, or assembling
of any agricultural or manufactured products;
B.
A commercial enterprise for storing, warehousing, distribution or selling products of agriculture, mining or industry, but other than provided in subsection
D or
E of this definition, not including any enterprise for the distribution to the public of electricity, gas, water or telephone or other services commonly classified as public utilities;
C.
A business in which all or part of the activities of the business
involves the supplying of services to the general public or to governmental
agencies or to a specific industry or customer;
D.
A telecommunications sales enterprise that makes the majority
of its sales to persons outside of New Mexico;
E.
A facility for the direct sales by growers of agricultural products,
commonly known as farmers’ markets;
F.
A business that is the developer of a metropolitan redevelopment
project;
Regional government.
Any combination of municipalities and counties that enter
into a joint powers agreement to provide for economic development
projects pursuant to a plan adopted by all parties to the joint powers
agreement.
Retail business.
A business that is primarily engaged in the sale of goods
or commodities at retail.
(Ordinance 15-03 adopted 2015)
A. The
governing body may assist economic development projects in any legally
permissible manner including, but not limited to, provision of land,
buildings and infrastructure provided that all the requirements of
this chapter are met. The town may provide land, buildings, or infrastructure
that it already owns, or it may build, purchase or lease the facilities
needed for an economic development project. The town, at its sole
discretion, may bear the full cost or contribute a portion of the
costs including the waiver of applicable fees. The town, at its sole
discretion, may also contribute to the payment of costs for professional
service contracts such as industry feasibility studies and planning
and design services needed to implement a project.
B. The
governing body may consider offering all forms of assistance allowed
under this chapter and any other legally permissible forms of assistance;
however, this does not establish any obligation on the town’s
part to offer any specific type or level of assistance.
C. The
money expended by the town in any one fiscal year shall not exceed
ten percent (10%) of the annual general funds expenditure by the town
during that fiscal year. The limits of this section shall not apply
to:
1. The
value of any land or building contributed to any project pursuant
to a project participation agreement;
2. Revenue
generated through the imposition of the municipal infrastructure gross
receipts tax pursuant to the Municipal Local Option Gross Receipts
Taxes Act for furthering or implementing economic development plans
and projects as defined in the Local Economic Development Act or projects
as defined in the Statewide Economic Development Finance Act; provided
that no more than the greater of fifty thousand dollars ($50,000.00)
or ten percent (10%) of the revenue collected shall be used for promotion
and administration of or professional services contracts related to
the implementation of any such economic development plan adopted by
the governing body;
3. The
proceeds of a revenue bond issue to which municipal infrastructure
gross receipts tax revenue is pledged;
4. Funds
donated by private entities to be used for defraying the cost of a
project.
D. The town shall maintain an economic development fund into which it shall deposit the revenue for economic development and any income from the economic development fund to which the limits of subsection
C of this section do not apply. Money in the economic development fund may be expended only as provided in the Local Economic Development Act or the Statewide Economic Development Finance Act.
(Ordinance 15-03 adopted 2015)
At its sole discretion, the governing body may assign to one
or more of its economic development contractors the following responsibilities
with regard to the economic development plan of the town:
A. Reviewing
and making recommendations to the governing body on applications for
assistance for economic development projects;
B. Reviewing
and making recommendations to the governing body on applications for
industrial revenue bonds (IRBs); and
C. Performing
such other tasks as the governing body may determine necessary or
desirable to further the economic development projects contemplated
herein.
(Ordinance 15-03 adopted 2015)
A. Any “qualifying entity” meeting the definition set forth in section
4.20.040 of this chapter may propose an economic development project to the town. Meeting the definition of a “qualifying entity” does not create any obligation on the part of the town.
B. Applications
from qualifying entities shall be submitted to the office of the town
manager.
C. Applications
shall contain at least the following information organized in the
order listed below:
1. Identification
information:
a. Complete
name and address of the qualifying entity;
b. Incorporation
papers with bylaws;
c. List
of board of directors and executive directors, with addresses; and
d. Resumes
of all directors and officers.
2. Evidence
of financial solvency (personal statements of principals):
a. Financial
statements (income statements and balance sheets) for the past three
(3) years;
b. Federal
tax numbers, New Mexico state taxation and revenue number and town’s
business license;
c. Projected
income statement for at least three (3) years.
3. Evidence
of organizational capacity:
a. Brief
history of the qualifying entity;
b. Organizational
chart of the qualifying entity;
c. Business
plans for the qualifying entity and proposed project (including cash
flow analysis);
d. Evidence
of ability to manage the project, such as, but not limited to:
(1) List and description of previously completed projects; and
(2) Resumes of key staff involved with the project;
e. The
qualifying entity shall disclose the following information (if the
answer is yes, the entity shall attach a written explanation):
(1) Has the qualifying entity or any of its officers ever been involved
in a bankruptcy?
(2) Has the qualifying entity or any of its officers ever defaulted on
obligations on which payments are not current?
(3) Does the qualifying entity have any loans or other financial obligations
on which payments are not current?
4. Funding
sources for the proposed economic development project:
a. Equity
investment of the qualifying entity;
b. Specific
assistance being requested of the town (e.g., specific parcel of land,
applicable fees, etc.), with the estimate of value; and
c. Funding
sources other than the town with letters of commitment of intent to
fund.
5. A complete
and specific description of the proposed economic development project,
including, but not necessarily limited to:
a. Business
activities to be conducted;
b. Management
and staffing requirements;
c. Property
and equipment requirements;
e. Transportation
requirements;
f. Utility
requirements, including, but not limited to, electric, gas, and water;
g. Solid
and liquid waste disposal requirements;
h. Infrastructure
requirements;
i. Regulatory
compliance requirements; and
j. Environmental
assessment.
6. A complete
and specific cost-benefit analysis. The source and rationale for any
multiplier effects shall be identified. The cost-benefit analysis
shall show that the town will recoup the value of its donation within
a maximum period of ten (10) years.
7. A complete
and specific description of the proposed economic development project’s
substantive contributions to the town including, but not limited to,
such factors as in-kind services to the town, jobs, expanded tax base,
property or other thing or service of value for the expansion or improvement
of the economy.
8. A complete
and specific description of the employee job training and career development
plan for the proposed economic development project.
9. Any
other information necessary for the town to make a determination as
to whether or not the applicant is a qualifying entity.
10. Any
other information required of the applicant by the governing body.
(Ordinance 15-03 adopted 2015)
A. The
governing body shall review each project application in accordance
with the criteria set forth hereinafter and all applicable laws, rules,
regulations, and policies and shall determine whether the entity and
the proposed project qualify pursuant to this chapter and all applicable
state laws and regulations.
B. If requested
to do so by the governing body, the town’s economic development
contractor shall review and make recommendations to the governing
body regarding the proposed project or projects.
(Ordinance 15-03 adopted 2015)
A. Applications
for economic development projects requesting economic assistance from
the town shall be evaluated by the following criteria:
1. Compliance
with all requirements for a “qualifying entity” and an
“economic development project”;
2. Feasibility
and substantive contribution of the proposed economic development
project;
3. Evidence
of financial solvency and financial ability to undertake and complete
the proposed economic development project;
4. Qualifications
of the principals to undertake and complete the proposed economic
development project;
5. Stability
of the qualifying entity and organizational capacity to undertake
and complete the proposed economic development project;
6. Cost-benefit
analysis:
a. The
number and types of jobs to be created both temporary construction
jobs and permanent jobs (by New Mexico department of workforce solutions
job category);
c. Determination
of which jobs are expected to be filled locally and which will be
filled by transfers from other facilities or recruited from outside
the Taos area;
d. Total
payroll expected at startup and after one year;
e. Anticipated
impact of the project on the local tax base;
f. Anticipated
impact on the local school system;
g. Anticipated
impact on the regional environment;
h. Anticipated
impact on utilities, water, and other infrastructure; and
i. Anticipated
impact on the community socioeconomic structure and cultural and historical
heritage.
(Ordinance 15-03 adopted 2015)
A. All
economic development projects receiving assistance from the town shall
be subject to an annual performance review conducted by the governing
body or its designee. The review shall evaluate whether the project
is attaining the goals and objectives set forth in the project participation
agreement. This review shall be presented to the governing body for
their consideration. The governing body at a public meeting, in a
manner consistent with law, may terminate assistance to the economic
development project by enactment of an ordinance which terminates
the agreement and specifies the disposition of all assets and obligations
of the project.
B. The
town shall retain a security interest which shall be specified in
the project participation agreement. The type of security given shall
depend upon the nature of the economic development project and assistance
provided by the town. Types of security may include, but are not limited
to:
1. Letter
of credit in the town’s name;
2. Performance
bond equal to the town’s contribution;
3. A mortgage
or lien on property or equipment;
4. Prorated
reimbursement of donations if a qualifying entity reduces its work
force or leaves the community before the end of the agreed upon term;
and
5. Other
security agreeable to both parties.
C. Should
a qualifying entity move, sell, lease or transfer a majority interest
in the economic development project before the expiration of the project
participation agreement, the town retains the right to deny any and
all assignments, sales, leases or transfers of any interests in the
economic development project until adequate assurances are made that
the transferee, assignee, or lessee is a qualifying entity and that
the terms of the agreement will be satisfied by the transferee, assignee,
or lessee. At its sole discretion, the town may choose to deny said
assignment, lease, or transfer or may negotiate a new agreement with
the new operator, or the town may reclaim the facility and enter into
an agreement with a new qualifying entity.
D. Any
qualifying entity seeking assistance from public resources shall commit
to operate in accordance with its project participation agreement
for a minimum of five (5) years from the date the ordinance adopting
the project participation agreement is passed by the governing body.
(Ordinance 15-03 adopted 2015)
A. The
qualifying entity shall submit to the town manager for review by the
governing body a draft project participation agreement which states
the contributions and obligations of all parties in the economic development
project. The agreement must clearly state the following items:
1. The
economic development goals of the project;
2. The
contributions of the town and the qualifying entity;
3. The
specific performance objectives;
4. A schedule
for project development and goal attainment;
5. The
security or securities being offered for the town’s investment;
6. The
procedures by which a project may be terminated and the town’s
investment recovered; and
7. The
time period for which the town shall retain an interest in the project.
Each project agreement shall have a “sunset” clause after
which the town shall relinquish interest in and oversight of the project.
B. After
reviewing the draft, the governing body or its designee may negotiate
any final terms and conditions of the agreement for final approval
by the governing body.
C. Each
project participation agreement shall be adopted as an ordinance and
enacted by the governing body at a public meeting.
D. All
project participation agreements shall require a substantive contribution
from the qualifying entity for each economic development project in
return for public support. A substantive contribution shall be of
value and may be paid in money, in-kind services, jobs, expanded tax
base, property or other thing or service of value for the expansion
of the economy.
E. The
qualifying entity shall provide security to the town within the project
participation agreement for the public support provided. The security
shall secure the qualifying entity’s obligations based on the
terms stated in the project participation agreement and shall reflect
the amount of public support provided to the qualifying entity and
the substantive contribution expected from the qualifying entity.
F. The
project participation agreement shall contain a mechanism for the
town to recover the public support provided to the qualifying entity
in the event that the qualifying entity fails to provide all or part
of the substantive contribution expected from the qualifying entity.
The recovery of public support shall be proportional to the failed
performance of the qualifying entity in regard to its substantive
contribution and shall take into account all previous substantive
contributions for the economic development project performed by the
qualifying entity and shall be based on the recovery mechanism and
terms specified in the project participation agreement.
G. The
project participation agreement must contain, at a minimum, the following:
1. The
contributions to be made by each party to the participation agreement;
2. The
security provided by the qualifying entity to the town and any other
governmental entity that is a party to the project participation agreement
and shall specify the form of the security such as a lien, mortgage
or other indenture and the pledge of the qualifying entity’s
financial or material participation and cooperation to guarantee the
qualifying entity’s performance pursuant to the project participation
agreement;
3. A schedule
for project development review and actions to be taken upon a determination
that project performance is unsatisfactory.
(Ordinance 15-03 adopted 2015)
All project monies shall be kept in a separate account by the
entity and the town, with such accounts clearly identified. These
accounts shall be subject to an annual independent audit.
(Ordinance 15-03 adopted 2015)
At any time, the governing body may terminate this chapter,
the town’s community development plan, and any or all projects.
Termination shall be by ordinance. An ordinance repealing an economic
development plan shall provide for satisfying existing contracts and
rights of the parties arising from those contracts. Upon the repeal
of a plan and termination or dissolution of a project, any unexpended
and unencumbered balances remaining in any project fund or account
may be transferred to the town’s general fund. In the case of
funds or accounts of a joint or regional government project, the unexpended
and unencumbered balances shall be divided among the local governments
as provided in the joint powers agreement.
(Ordinance 15-03 adopted 2015)
The town may engage in economic development projects involving
one or more other governmental entities for projects, which encompass
more than one municipality or county. In such instances, a joint powers
agreement shall be adopted by the relevant governing bodies. This
agreement will establish the application criteria and the terms of
all project participation agreements. Criteria established under a
joint power agreement shall be consistent with the provisions of this
chapter.
(Ordinance 15-03 adopted 2015)
The town is authorized to submit applications to the New Mexico
Economic Development Department (NMEDD) for Local Economic Development
Act (LEDA) funding to support providing additional water utility service.
The town is further authorized to enter into an intergovernmental
agreement with the NMEDD for the receipt and transfer of the aforementioned
LEDA grant funding.
(Ordinance 22-20 adopted 11/8/2022)