HomeMy WebLinkAboutOrdinance 2490
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ORDINANCE NO. 2490
WHEREAS, the City of North Richland Hills City Council has determined
that the economic well-being of the City of North Richland Hills is of primary
concern, and;
WHEREAS, Chapter 312, Texas Tax Code, known as the Texas Property
Redevelopment and Tax Abatement Act, provides that the City of North Richland
Hills has the authority to create reinvestment zones within the City for purposes
of economic development, and;
WHEREAS, on March 24, 1997 and September 22, 1997, the City of
North Richland Hills City Council, by resolution, established certain guidelines
and criteria governing tax abatement agreements and indicated the desire of the
City of North Richland Hills to remain eligible to participate in tax abatement
agreements, and;
WHEREAS, Pretty M.T., LP on behalf of Spectrum Integrated Services,
Inc. (Software Spectrum) has requested the designation of a reinvestment zone
for the purpose of tax abatement of real property belonging to Pretty M.T., LP for
the purpose of economic development as defined under the Texas Property
Redevelopment and Tax Abatement Act, and;
WHEREAS, on the 2nd day of July, 2000, notice was published in the Fort
Worth Star-Telegram stating that a public hearing would be conducted by the
City of North Richland Hills City Council on the 10th day of July, 2000, to
consider the request of Pretty M.T., LP to have the property herein described in
Exhibit "An as a reinvestment zone, and;
WHEREAS, it is the finding of the City Council of the City of North
Richland Hills that the terms Of the agreement and the properties subject to the
agreement as presented to the City of North Richland Hills by Pretty M.T., LP
meet the applicable Guidelines and Criteria adopted by the City Council as of
March 24, 1997 (and amended September 22, 1997), and;
WHEREAS, it is the finding of the City Council of the City of North
Richland Hills that the creation of a reinvestment zone for the above stated
property would be a benefit to the said property and the development anticipated
to occur in the proposed zone would contribute to the economic development of
the City of North Richland Hills, and;
WHEREAS, it is the finding of the City Council of the City of North
Richland Hills that the designation of the reinvestment zone would contribute to
employment within the City of North Richland Hills, Texas, and;
-
.
WHEREAS, it is the finding of the City Council of the City of North
Richland Hills that the designation of the reinvestment zone would attract major
investment in the zone.
BE IT THEREFORE ORDAINED that the City Council of the City of North
Richland Hills hereby designates as a reinvestment zone the property herein
described in Exhibit "An pursuant to the authority contained in Section 312.401 of
the Texas Property Redevelopment and Tax Abatement Act.
Passed in open session ofthe City Council this 10th day of July, 2000.
Charles Scoma, yor
City of North Rich and Hills, Texas
ATTEST:
@aátilà~
Patricia Hutson, City Secretary
APPROVED AS TO FORM AND LEGALITY:
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PERSONAL PROPERTY
IMPROVEMENTS (ineligible
for abatement
Modular Furniture and fixtures
PC's, rinters, etc.
W"
Tele hone Switch and ui ment
Securi S stem
TOTAL:
ESTIMATED COST
SI 500000
S2,000 000
S225 000
SI,OOO,OOO
S100000
$4 825 000
REAL PROPERTY ESTIMATED COST
IMPROVEMENTS (eligible for
abatement)
Paving S101,404
Concrete $136,840
Steel $55,649
Metal StudslDrv· wall $116,720
CabinetS/Counters $4,280
Roofing $349,150
Concrete sawing $11 ,800
GIa7.ina S99,860
DoorslHardware $7,050
EIFS/PJaster $81,312
Floor Prep Work $15.000
Acoustical Ce~ S65,760
Painthut $33.661
Plumbing $7,800
HVAC $290,614
Fire Sprinkler System $35,440
Electrical $112,280
Skylights $58,374
Masonry wall $19,250
Landscaping & Irrigation $78,542
Tenant Finish-out/Improvements $2,700,000
TOTAL: $4,380,786
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PERSONAL PROPERTY ESTIMA TED COST
IMPROVEMENTS (ineUgible
for abatement)
Modular Furniture and fixtures $1,500,000
PC's, printers, etc. $2,000,000
Wiring . $225,000
Telephone Switch and equipment $1,000,000
Security System $100.000
TOTAL: $4,825,000
REAL PROPERTY ESTIMATED COST
IMPROVEMENTS (eligible for
abatement)
Paving $101,404
Concrete $136.840
Steel $55.649
Metal StuC1S1urv wall $116,720
Cabinets/Counters $4,280
Roofin2 $349,150
Concrete sawin2 $11,800
GJaziruz $99,860
DoorslHardware $7,050
EIFS/P~er $81,312
Floor Prep Work $15.000
Acoustical Ceiling $65,760
Painting $33,661
Plumbina $7,800
HVAC $290,614
Fire Sprinkler System S35,440
Electrical S112,280
Skylights S58,374
Masonry wall $19,250
Landscaping & Irrigation $78.542
Tenant Finish-out/Improvements S2,700,000
TOTAL: $4,380,786
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APPLICATION GUIDELlNESI ECONOMIC QUALIFICATIONS
An applicant must submit the Application for Tax Abatement prior to the
commencement of construction. Pretty M.T., LP's application would qualify as it
was received on April 26, 2000,
For a modernized facility, an applicant must invest not less than $1.5 million in
the facilities over a three-year period. Pretty M.T., LP's application would qualify
as they expect to invest a minimum of $1.5 million as noted above.
An applicant must create and/or retain not less than 10 jobs associated with the
production of goods and services at the authorized facilities. Pretty M.T., LP's
application would qualify as they anticipate an employment increase of 600 new
jobs created (95% which would be full-time) upon completion of these
improvements.
APPLICATION REVIEW
The City received Pretty M.T., LP's application on April 26, 2000. The application
and accompanying letter are attached for review purposes. Please note the
applicant is asking for an abatement of the total facility that is being
modernized to include improvements to Software Spectrum and the
remaining space that makes up Richland Pointe.
All requirements to make application for tax abatement have been met. Included
are:
a. Written Description of Project.
b. Statement of Improvements.
c. Map of Area.
d. Time Schedule. _
e, Financial Information,
ECONOMIC EFFECT
Pretty M.T" LP's redevelopment and expansion will have a positive economic
impact on the City of North Richland Hills and it's citizens. Areas of impact
include:
* The creation of 600 highly skilled jobs in the technical industry, 95% which
are full-time
* An estimated $12.6 million (of direct impact) in payroll
* An increase in the City's real and personal property values, helping
strengthen North Richland Hills' economic base. Almost $5 million (4.8) of
The adopted Guidelines and Criteria for granting tax abatement in the City of
North Richland Hills require staff to perform a Feasibility Study setting out the
impact of the proposed reinvestment zone and tax abatement.
QUALIFICATIONS TO APPLY
Pretty M.T" LP qualifies to apply for tax abatement as a regional service facility.
A regional service facility is defined as "buildings and structures, including fixed
machinery and equipment, used or to be used to provide a service from which a
majority of revenues generated by activity at the facility are derived from outside
Tarrant Countyn.
Pretty M.T., LP is redeveloping and modernizing Richland Pointe Mall into a
business center to be used by high-density office tenants, Currently, there is a
24-Hour Fitness on-site that occupies 28,775 square feet and will remain at the
business center upon modernization. The remaining 171,000 square feet is
situated for office conversion.
As defined in the Guidelines and Criteria, "modernization" means the upgrading
of existing facilities which increased the productive input or output, updates the
technology or substantially lowers the unit cost of the operation. Modernization
may result from the construction, alteration, or installation of buildings, structures,
fixed machinery or equipment. It shall not be for the purposes of reconditioning,
refurbishing, or repairing.
IMPROVEMENTS
The proposed modernization is located at 5201 Rufe Snow Drive, on 17.644
acres one block north of the intersection of N.E. Loop 820 and Rufe Snow Drive.
Modernization plans include improvements to 73,240 square feet of Richland
Pointe to accommodate Software Spectrum and provide space for their
expanding software support organization.
Upgrades include the installation of offices, additional restrooms, breakrooms,
training and conference rooms, and large data and telecommunications rooms,
There will also be an Uninterruptible Power Supply (UPS) system installed to
support Software Spectrum's advanced customer service support technology.
Improvements will also be made to the remaining available lease space, which is
approximately 98,595 square feet in Richland Pointe to accommodate the other
tenants who will occupy the business center.
Construction start:
Anticipated completion:
Real Property Improvements:
Personal Property Improvements:
April 28, 2000
July 21, 2000
$4.3 million
$4.8 million
Pretty M.T., LP's planned personal property improvements are ineligible for
abatement and will become immediately taxable.
If the Tarrant Appraisal District gives full value to these improvements, the
City will begin realizing an additional $27,503 in property tax revenues (based
on the present rate of $,57/ $100 of value)
* A positive impact on our residential housing market
* An excellent match for the work force available in and around North Richland
Hills
TAX IMPACT
Our guidelines for tax abatement allow for a 500% reduction in property taxes-
on the improvements only-and the duration of the agreement shall not exceed
10 years or one-half the economic life of the eligible property, Based on our
existing tax rate of .57 cents, abatement on the increased value of
$4,380,000 would abate $124,830 in taxes over the life of the contract.
It should also be noted that taxes would not be abated on:
1) The existing structures owned by Pretty M.T" LP
2) Land Value
3) Personal Property
FUTURE GROWTH
As noted in their application, "In the mid-1980s, the mall became an obsolete
concept due to the development of new, more attractive retail centers, and as a
result occupancy dwindled to its current 19%," Repositioning the mall from a
retail concept to a high-density/ back office or call center use will make the
property viable for the future so it can once again reach full-occupancy, positively
impact the surrounding properties and community.
RECOMMENDATION
After a comprehensive review of this application, the Economic Development
Department recommends that the Application for Tax Abatement submitted by
Pretty M.T., LP is approved.
Respectfully submitted,
John Pitstick
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c: Map, Location and Ownership
See attached map.
Location: Lot 1R, Block 1, TAPP ADDITION
Ownership: Pretty M.T., LP
17740 N, Dallas Parkway, Suite 230
Dallas, Texas 75287
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BOOK PAGE 1051
DETAIL MAP SECTION STARTS ON INDEX PAGE 141
COPYRIGHT 1971,1997 by MAPSCO, INC. -ALL RIGHTS RESERVED
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18 April 2000
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E. Software Spectrum Financial Information
Staœment of Operations Data
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'IW ErdIcI Yeir Erded
Apil æ, II*nh31,
1199 19!11 1996 &5
Net sales $ 88tlpa7 $ 796;285 $ 398'01 $ 352,t41
Net inmme (loss) 4,487 (915) 7)66 8,7æ
Earrings 00$$) per share
Bue 1D4 (.20) 1.76 2,11
Dituted 1D3 (.20) 1.73 2D8
Balance Sheet Data
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Apilæ, ~h31.
19!18 - 1SIi96 &5
v.brking capital $ 11,908 $ 31,673 $ 59,(52 $ 58,407
Tot,¡l assets 258,631 270,441 150,180 124,698
Tot. debt 8,206 37,370
sh.eholders' eq.Ai\t 76,270 73,939 73,363 65,Œ4
Nett Sillies Earnings per share
p.S, IbIits '" iii. "dr#iISj
930.0 884.1 2.08
796.3 1.73
1.43
1.03
398.5
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1999 1998 1997 t996 1995 1999 1998 . 1996 1995
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