DEPARTMENT: Planning and Community Development
DEPARTMENT HEAD: John Dugan
COUNCIL DISTRICTS IMPACTED: 1, 2 & 5
SUBJECT:
Consideration of a resolution approving Bexar County tax abatements within the boundaries of the Inner City Tax Increment Reinvestment Zone (TIRZ) and the Midtown Tax Increment Reinvestment Zone (TIRZ) as required by State law.
SUMMARY:
City Council is being asked to consider a resolution approving two tax abatements by Bexar County on projects that fall within the boundaries the following City Designated TIRZ; Inner City TIRZ and Midtown TIRZ.
The project in the Inner City TIRZ is a mid-rise, market-rate apartment community of 302 Class A multi-family rental units with 2,838 square feet of retail space at 1130 Broadway totaling $40 million in capital investments. The property is being developed by 1130 Broadway Residential, L.P. The County is providing an abatement of 50% of the County’s taxes over ten years estimated at $454,114. The City, through the Center City Housing Incentive Policy, has provided incentives for this multifamily housing project totaling $4,646,861.
The project in the Midtown TIRZ is a mid-rise, market-rate apartment community of 191 multi-family rental units with a parking structure and ground floor retail space at 111 W. Jones Street totaling $39.6 million in capital investments. The property is being developed by Alamo Manhattan River Walk, LLC. The County is providing an abatement of 50% of the County’s taxes over ten years estimated at $563,296. The City, through the Center City Housing Incentive Policy, has provided incentives for this multifamily housing project totaling $4,489,253.
Because these projects are within the boundaries of active City of San Antonio designated Tax Increment Reinvestment Zones, the County is required to seek approval from all taxing entities participating in the zones in accordance with the State Property Tax Code Section 311.0125(b)(1)(2).
BACKGROUND INFORMATION:
At the request of the Bexar County Economic Development Department, on November 13, 2015 the Inner City TIRZ Board of Directors approved a resolution authorizing the Bexar County tax abatement for the 1130 Broadway project in the Inner City TIRZ boundary. On November 17, 2015, the Midtown TIRZ Board approved a resolution authorizing the Bexar County tax abatement for the 111 W. Jones Street project within the Midtown TIRZ boundary.
By providing tax abatements, the County is providing necessary incentives to support these projects which serve to increase housing options in downtown San Antonio. Because it is not a Participating Taxing Entity (PTE) in the Inner City or Midtown TIRZ, Bexar County cannot support these projects through the Tax Increment Finance mechanism.
Construction on the 1130 Broadway project started in August 2014 and is scheduled for completion in September of 2016. The 111 W. Jones project started construction in October of 2015 and is scheduled for completion in July of 2017.
ISSUE:
City Council is being asked to consider a resolution approving two tax abatements by Bexar County on projects that fall within the boundaries the following City Designated TIRZ; Inner City TIRZ and Midtown TIRZ.
The project in the Inner City TIRZ is a mid-rise, market-rate apartment community of 302 Class A multi-family rental units with 2,838 square feet of retail space at 1130 Broadway totaling $40 million in capital investments. The property is being developed by 1130 Broadway Residential, L.P. The County is providing an abatement of 50% of the County’s taxes over ten years estimated at $454,114. The City, through the Center City Housing Incentive Policy, has provided incentives for this multifamily housing project totaling $4,646,861.
The project in the Midtown TIRZ is a mid-rise, market-rate apartment community of 191 multi-family rental units with a parking structure and ground floor retail space at 111 W. Jones Street totaling $39.6 million in capital investments. The property is being developed by Alamo Manhattan River Walk, LLC. The County is providing an abatement of 50% of the County’s taxes over ten years estimated at $563,296. The City, through the Center City Housing Incentive Policy, has provided incentives for this multifamily housing project totaling $4,489,253.
Both the Inner City and Midtown TIRZ Boards have approved the proposed Bexar County tax abatements. City Council, as the governing body of the sole taxing unit depositing taxes into the Inner City and Midtown TIRZ funds, is being asked to approve the tax abatements to facilitate the County providing these necessary incentives. Both Bexar County and the City of San Antonio share the common goal of increasing the availability of housing in downtown San Antonio which is being fulfilled through the support of these projects.
In accordance with Section 311.0125 of the State Tax Code, a taxing unit seeking to abate taxes on real property located in a reinvestment zone must obtain approval from the following entities in order for the agreement to be effective; “The board of directors of the reinvestment zone and the governing body of each taxing unit that imposes taxes on real property in the reinvestment zone and deposits or agrees to deposit any of its tax increment into the tax increment fund for the zone”.
ALTERNATIVES:
The City could deny the tax abatement requests from the County. This approach would deny the partnership opportunity between the County and City and potentially prevent the development of these projects which would be in opposition to the shared goal of increasing housing options in downtown San Antonio.
FISCAL IMPACT:
This action does not impact the City’s General Fund or any TIRZ revenue. Bexar County is not a Participating Taxing Entity in either of the impacted TIRZ and the County is only abating its portion of the property tax bill for the proposed projects.
RECOMMENDATION:
Staff recommends City Council approve the proposed Bexar County tax abatements as requested by the County.