Guidelines and Criteria for Economic Development Incentives

Introduction & Goals

It is the intent of this Policy to provide guidelines and criteria, requirements, and procedures to evaluate and approve any Incentives deemed necessary by the City for the furtherance of its economic development and community goals. This Policy shall include provisions for Tax Abatement as well as use of sales tax funds, general funds of the City, and any other resources as approved by the Council. Incentives may be considered for both new facilities and for the Expansion or Modernization of existing Facilities and structures. Nothing herein shall imply or suggest that the City is under any obligation to provide any Incentive to any Applicant. The Council retains the right to evaluate applications and grant Incentives, if any, as deemed appropriate on a case-by-case basis without the necessity of amending any contrary provisions of this Policy. Following are the goals of this Policy:

• When in the best interests of the City, provide Incentives to existing businesses that will enhance the commercial viability and sustainability of existing commercial properties in the City
• When in the best interests of the City, provide Incentives to the extent necessary to attract desired businesses or developers to invest in the City
• Encourage development and / or redevelopment of targeted areas in the City
• Create employment opportunities for residents of the City
• Increase the non-residential ad-valorem tax and / or sales and use tax revenue base for the City
• Ensure that all policies, procedures and any resulting Performance Agreements related to the provision of Incentives to stimulate economic development shall comply with all applicable state statutes.

General Eligibility

The following shall establish the minimum eligibility for receiving Incentives identified in this Policy.

Properties: Only properties meeting the following requirements at the time an Application is submitted shall be eligible to receive Incentives outlined by this Policy.

• Within the City: Property must be located within the City’s municipal boundaries unless provisions for annexation into the City are part of the Performance Agreement.
• Zoning: Property must be zoned for the proposed uses.
• Taxes: Property shall be in good standing as it relates to taxes due to the City.
• Liens: Property shall be in good standing as it relates to any liens held by the City.
• Ownership: Property owners must provide sufficient proof of ownership.
• Code Violations: Property must not have any outstanding code violations with the City.
• Construction Commencement: Construction for the Facility must not have commenced prior to the approval of a Performance Agreement.

Businesses: Only businesses meeting the following requirements shall be eligible to receive Incentives outlined by this Policy.

• Taxes: The business shall be in good standing as it relates to taxes due to the City.
• Property Owner Approval: Businesses, if not the owner of the property to be occupied, must provide a copy of their lease agreement and support of the Incentives Application from the Property owner prior to City approval of the Application.
• Length of Operations: Existing businesses must have maintained operations in the City for two (2) years consecutively in order to receive Incentives.

Statutory Limitations: It is the intent of the City to comply with all statutory limitations on the use of any public funds for the purposes identified herein.

 Click here to view the full Comprehensive Incentive Policy

Following are Incentives that the City, on a case-by-case basis, could consider granting for specific Projects depending on the merits of the Project. Incentives, including Tax Abatement, are available to new Facilities and structures and the Expansion and Modernization of existing Facilities and structures. This shall include the redevelopment of existing properties. Any Incentives provided pursuant to this Policy shall not reduce the Base Year Value of the Facility.

Financial – Ad Valorem Taxes:

The City may consider granting the following Incentives relative to Ad Valorem Taxes.
Keller, Texas - Incentives Policy - Approved: 2022-01-18 - Page 5 of 12

Real Property Tax:

The City may consider abating the taxes on Real Property by approval of a Tax Abatement Agreement or by approval of a Performance Agreement granting back Real Property taxes paid to the City.

Business Personal Property Tax:

The City may consider abating the taxes on Business Personal Property by approval of a Tax Abatement Agreement or by approval of a Performance Agreement granting back Business Personal Property taxes paid to the City.

Tax Stabilization / Incremental Increase:

In a situation where an existing Facility may be Expanded or Modernized, the City may consider stabilizing the ad valorem taxes collected as of the date of completion and / or an incremental yearly increase to market rates. This shall be accomplished by granting back the increase in taxes paid to the City.

Agricultural Exemption:

The City may consider granting back all or a portion of the Ag Exemption City taxes due at the time of development.

Financial – Sales Tax Grants / Reimbursements:

Through approval of a Performance Agreement, the City may provide Grants of all or a portion of the following sales and use taxes. Where the Project is a retail development, for the purposes of evaluating and granting incentives in accordance with this Policy, sales and use taxes shall be measured net of any business relocations occurring within the City. i.e. if a retail business is currently operating in the City, and relocates to the new development, it’s sales taxes shall be excluded from the calculation of new sales taxes generated.

General Fund Sales Tax:

The sales and use taxes going to the City’s general fund.

Financial - Fee Reductions / Credits:

The City may consider the reduction, credit or reimbursement of all or a portion of the following fees. This shall not include any charges by third-parties assisting the City with implementation of services provided by the fees unless so provided in an approved Performance Agreement.

Impact Fee - Water:

Any water Impact Fee charged by the City. This shall not include the “pass-through” Impact Fees owed to any other Agency.

Impact Fee - Wastewater:

Any wastewater (aka sanitary sewer) Impact Fee charged by the City. This shall not include the “pass-through” Impact Fees owed to any other Agency.

Impact Fee - Roadway:

Any roadway Impact Fee charged by the City.

Road Participation Fee:

Any roadway participation fee charged by the City.

Drainage Improvement Fee:

Any fee charged for the improvement of drainage facilities in the City.

Park Dedication Fee:

Any fee charged for the improvement of park systems in the City.

Public Art Fee:

Any fee charged to support public art in the City.

Building Permit Fee:

Any fee related to the review of non-Public Works construction plans and building plans required for the issuance of a building permit.

Plan Review Fee:

Any fee related to the review and administrative processing of construction plans for Public Works Improvements.

Inspection Fee:

Any fee related to the inspection of the Improvements.

The City may consider the following miscellaneous financial Incentives.

Equipment Purchase / Lease:

Funds provided to assist with or provide for the purchase of equipment that increases production for the business.

Lease Guarantee:

An Agreement by the City to guarantee any part of a real estate lease for a desired business.

Loan Guarantee:

An Agreement by the City to guarantee any part of the construction or operating loans related to the Project.

Forgivable Loan:

An agreement by the City to provide a loan whose repayment may be forgiven under particular circumstances.

Cash Grants:

Grants of cash to the Applicant pursuant to an Agreement.

Sales, Lease or Exchange of Land or Buildings:

The City recognizes that the sale and conveyance, lease, or exchange of certain property owned by the City may meet the objectives identified in this Policy. In accordance with State Law, the City may consider the sale, lease or exchange of land without the necessity of accepting written bids pursuant to a published notice and at or below market value to further the objectives identified herein.

Build-to-Suit / Leaseback:

An agreement where the City builds a building or facility to suit the needs of the Applicant in exchange for a commitment from the applicant to lease the facility from the City.

Free / Reduced-Cost Land:

Any provision where the City provides free or reduced-cost lands to the Applicant.

Free / Reduced-Cost Building:

Any provision where the City provides a free or reduced-cost building to the Applicant.

Land Lease:

Any provision where the City leases rights to City-owned land to the Applicant to allow construction of their Facility.

Employment-Related:

The City may consider the following employment-related Incentives.

Relocation Assistance:

Any provision where the City provides assistance to new employees relocating to residency within the City.

Cash for Employment:

Any provision where the City provides for one-time payments to the Business for each new employee of a certain classification established at a new or existing Facility in the City.

Employee Recruitment Assistance:

Any provision where the City provides assistance with the recruiting of new employees to a new or existing facility in the City.

Employee Training Assistance:

Any provision where the City provides assistance in the training of new employees employed at a new or existing facility in the City.

Infrastructure Assistance:

The City may consider the following infrastructure assistance Incentives.

Water Line Extensions:

Participation in all or a portion of the costs of extending water distribution lines to the Facility.

Sewer Line Extensions: Participation in all or a portion of the costs of extending sanitary sewer lines to the Facility.

Roadway Improvements:

Participation in all or a portion of the costs of roadway improvements serving the Facility.

Storm Drainage Improvements:

Participation in all or a portion of the costs of storm drainage improvements at or downstream of the Facility.

Development Cost Participation:

The City may consider participation in the following development cost Incentives.

Demolition:

Participation in all or a portion of the costs of demolishing existing structures on a property.

Environmental Mitigation:

Participation in all or a portion of the costs of mitigating environmental issues on a property.

Process Related:

The City of Keller provides timely and competitive permitting and development processing, however, the City may consider process-related assistance as deemed appropriate and when adequate Staffing is available. In all instances, any accelerated or unique process shall meet all statutory requirements.

Economic Development District Establishment:

In instances where the Project is of a significant scope and scale, the City may consider the establishment of unique economic development districts (e.g. Tax Increment Reinvestment Zone, Public Improvement District).

Hotel Occupancy Tax:

The City may consider the use of Hotel Occupancy Tax pursuant to Chapter 351 of the Texas Tax Code.

Support for State Incentives:

The City may consider providing support for the Project in the application and processing of State of Texas incentives.

Support for Federal Incentives:

The City may consider providing support for the Project in the application and processing of Federal incentives. 

Click here to view the full Comprehensive Incentive Policy