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8436-13ORDINANCE NO. 8436 -13 AN ORDINANCE OF THE CITY OF CLEARWATER, FLORIDA, ESTABLISHING AN EXEMPTION FROM CERTAIN AD VALOREM TAXATION FOR CERTAIN NEW BUSINESSES AND EXPANSIONS OF EXISTING BUSINESSES; TO BE CODIFIED AS ARTICLE VII OF CHAPTER 29 OF THE CODE OF ORDINANCES OF THE CITY OF CLEARWATER; PROVIDING FOR ENACTMENT AUTHORITY; PROVIDING FINDINGS OF FACT; PROVIDING FOR DEFINITIONS OF TERMS; PROVIDING FOR ESTABLISHMENT OF ECONOMIC DEVELOPMENT AD VALOREM TAX EXEMPTION; PROVIDING FOR AN APPLICATION FOR EXEMPTION; PROVIDING FOR THE CITY COUNCIL'S CONSIDERATION OF SUCH APPLICATION; PROVIDING FOR NO APPLICATION FEES; PROVIDING FOR CONTINUING PERFORMANCE; PROVIDING FOR CITY COUNCIL REVOCATION OF EXEMPTION; PROVIDING FOR SEVERABILITY; PROVIDING FOR A SUNSET DATE AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the City of Clearwater believes that local governments should support economic growth by providing an incentive for employment opportunities that will lead to the improvement of the quality of life of the residents of the City of Clearwater (the "City "), and the positive expansion of the economy; and WHEREAS, to this end, the City Council desires to offer ad valorem tax exemptions to new qualifying businesses relocating to the City and to expansions of qualifying businesses already situated in the City; and WHEREAS, the granting of ad valorem tax exemptions to such businesses will provide the City with an additional economic development incentive which will enhance the ability of the City to be competitive when trying to encourage new business development in the City and retain local businesses with planned expansions; and Ordinance No. 8436 -13 WHEREAS, many of the surrounding Florida counties and cities including but not limited to the City of St. Petersburg, the City of Tampa, Hillsborough County, the City of Sarasota and Sarasota County have already implemented ad valorem tax exemption programs potentially putting the City of Clearwater at a competitive disadvantage in the recruitment of new businesses and the retention of existing and expanding businesses; and WHEREAS, such exemptions are authorized pursuant to Article VII, Section 3, of the Constitution of the State of Florida and Section 196.1995, Florida Statutes, upon the successful passage of a referendum; and WHEREAS, the electors of the City have authorized the granting of ad valorem tax exemptions by the successful passage of a referendum held on November 6, 2012; and WHEREAS, it is a recognized function of local government to promote economic development within its jurisdiction by providing financial incentives that will encourage new businesses to relocate within its jurisdiction and existing businesses to expand, thereby creating employment opportunities that will benefit the entire community; and WHEREAS, the economic recession from 2008 to 2012 has resulted in a high unemployment rate in the City, impacting the quality of life for the citizens of the City and the sustainability of local businesses; and WHEREAS, in order to ensure that applications for Economic Development Ad Valorem Tax Exemptions are considered in a non - arbitrary and 2 Ordinance No. 8346 -13 non - discriminatory manner, it is necessary to establish guidelines that further the City's economic development policy to assist the Administration in making its determinations; and WHEREAS, the City determines that the granting of Economic Development Ad Valorem Tax Exemptions to new businesses locating in the City and to existing businesses expanding in the City as provided in this Ordinance will promote and strengthen the local economy which will enhance the health, safety and welfare of the citizens of the City, which action is in the best interest of the City and serves a public purpose; now therefore, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CLEARWATER, FLORIDA: SECTION 1. The Code of Ordinances of the City of Clearwater is hereby amended by creating a new Chapter 29, Article VII, known as the "City of Clearwater Economic Development Ad Valorem Tax Exemption Ordinance." to read as follows: ARTICLE VII. — CITY OF CLEARWATER ECONOMIC DEVELOPMENT AD VALOREM TAX EXEMPTION Sec. 29.200. Enactment Authority. Article VII, Section 3, of the Constitution of the State of Florida and Section 196.1995, Florida Statutes, empower the City to grant Economic Development Ad Valorem Tax Exemptions to New Businesses and Expansions of Existing Businesses after the electors of the City, voting on the question in a referendum, authorized such exemptions. In a referendum held on November 6, 2012, the electors of the City of Clearwater authorized the City to grant Economic Development Ad Valorem Tax Exemptions. 3 Ordinance No. 8346 -13 Sec. 29.201. Findings of Fact. (a) It is a recognized function of local government to promote economic development within its jurisdiction by providing financial incentives that will encourage new businesses to relocate within its jurisdiction and existing businesses to expand creating employment opportunities that will benefit the entire community. (b) The current economic climate has resulted in a high unemployment rate in the City of Clearwater, impacting the quality of life for the City's citizens and the sustainability of local businesses. (c) The City Council of the City of Clearwater (the "Council ") desires to offer Economic Development Ad Valorem Tax Exemptions to new businesses relocating to the City of Clearwater and to businesses already situated in the City of Clearwater that are expanding in order to foster economic growth and increased employment. (d) In order to ensure that applications for an Economic Development Ad Valorem Tax Exemption are considered in a non - arbitrary and non- discriminatory manner, it is necessary to establish guidelines that further the Council's economic development peliGy strategic plan to assist the Council in making its determinations. (e) Applications for an Economic Development Ad Valorem Tax Exemption shall be considered by the Council in its legislative capacity on a case -by- case basis, after considering the Property Appraiser's report and the review criteria. (f) No precedent shall be implied or inferred by the granting of an exemption to a new or expanding business. (g) On June 20, 2012, the Council adopted Ordinance No. 8338 -12 calling for a special referendum seeking authorization to grant Economic Development Ad Valorem Tax Exemptions to qualifying businesses. The referendum passed on November 6, 2012. Sec. 29.202. Definitions of Terms. The following words, phrases, and terms shall have the same meanings attributed to them in current Florida Statutes and the Florida Administrative Code, except where indicated otherwise: (a) Applicant — Any person, firm, partnership, or corporation who files an application with the City seeking an Economic Development Ad Valorem Tax 4 Ordinance No. 8346 -13 Exemption. (b) Business — Any for - profit activity engaged in by any person, firm, partnership, corporation, or other business organization or entity. (c) City — The City of Clearwater, Florida. (d) Council — The City Council of the City of Clearwater, Florida. (e) Department — Economic Development Department of the City of Clearwater. (f) Economic Development Ad Valorem Tax Exemption — Ad valorem tax exemption granted by the Council in its discretion to a qualifying New Business and /or an Expansion of an Existing Business for up to 75 % of the City ad valorem tax levied on the qualifying property of said Business for a period up to ten (10) years; provided, however, the exemption shall not apply to taxes levied for the payment of bonds or taxes authorized by a vote of the electors pursuant to Section 9 and Section 12, Article VII of the State Constitution. (g) Expansion of an Existing Business — As set forth in the chart in §29.205(b). (h) Improvements — Physical changes made to raw land, and structures placed on or under the land surface. (i) Metropolitan Statistical Area (MSA) — Refers to a geographical region with a relatively high population density at its core and close economic ties throughout the area. Such areas are not legally incorporated. For purposes of this Ordinance, the MSA means the Tampa — St. Petersburg — Clearwater, FL MSA. (j) New Business — As set forth in the chart in §29.205(b). (k) Qualifying Average Annual Wage - The average wage of all new jobs created must be greater than the average annual wage for Pinellas County as published yearly by Enterprise Florida, Inc. in the year in which the ED AVTE is granted. (I) Sales Factor — The sales factor is a fraction, the numerator of which is the total sales of the taxpayer in the MSA during the taxable year or period and the denominator of which is the total sales of the taxpayer everywhere during the taxable year or period. Sec. 29.203. Establishment of Economic Development Ad Valorem Tax 5 Ordinance No. 8346 -13 Exemption. (a) There is herein established an Economic Development Ad Valorem Tax Exemption (hereinafter the "Exemption ") for ad valorem taxes levied by the City. The Exemption is a local option tax incentive for a qualifying New Business or Expansion to an Existing Business which may be granted or refused at the sole discretion of the Council. (b) The Exemption shall not accrue to Improvements to real property made by or for the use of a qualifying New Business or Expansion to an Existing Business when such Improvements have been included on the tax rolls prior to the effective date of the ordinance specifically granting a Business an Exemption. (c) At the discretion of the Council, the Exemption may be granted for up to seventy five (75 %) percent of the assessed value of all Improvements to real property made by or for the use of a qualifying New Business and of all tangible personal property of such New Business, or up to seventy five (75 %) percent of the assessed value of all added Improvements to real property made to facilitate the qualifying Expansion of an Existing Business and of the net increase in all tangible personal property acquired to facilitate such Expansion of an Existing Business, provided that the Improvements to real property are made or the tangible personal property is added or increased on or after the day the Ordinance granting the Exemption is adopted. Property acquired to replace existing property shall not be considered to facilitate a business expansion. (d) No Exemption shall be granted for the land upon which a New Business or Expansion of an Existing Business is to be located. (e) Any Exemption granted for a New Business or Expansion of an Existing Business is non - transferable between businesses; provided, however, if the only change to the Business is one of ownership and all other provisions of the original Application remain in effect, the Exemption may be transferred, subject to compliance with §29.207. (f) Taxes Applicable. The Exemption shall apply only to taxes levied by the City. The exemption shall not apply to taxes levied by the County, school district, or water management district, or to taxes levied for the payment of bonds or taxes authorized by a vote of the electors pursuant to Section 9(b) or 12, Article VII of the Florida Constitution or any other taxes levied by any other entity. Sec. 29.204. Application for Exemption. (a) Application - Any eligible person, firm, partnership or corporation which 6 Ordinance No. 8346 -13 desires an Economic Development Ad Valorem Tax Exemption shall file with the City a written application. The Application must be filed no later than March 1 of the year the exemption is desired to take effect (b) Review - Upon submittal of the Application, the City Manager or his designee shall review same and, within ten (10) days of submission, notify the Applicant of any facial deficiencies. Complete Applications shall be scheduled for a public hearing before the Council no later than 45 days following receipt of a complete Application. The 45-day period shall include the Property Appraiser's review pursuant to §29.205(a). Applicant will be notified of the date and time of the public hearing. (c) Agreement — A Business will be required to enter into an agreement with the City stating that the Business will satisfy the Business Maintenance and Continued Performance Conditions set forth in the Application. Sec. 29.205. Council Consideration of Applications. (a) Property Appraiser Review - Before the Council takes action on an Application, a copy of the Application, once deemed complete, shall be delivered to the Property Appraiser for review. Within fifteen (15) days of receipt of the complete Application, the Property Appraiser shall provide a report to the Council, which shall include the following: (1) The total revenue available to the City for the current fiscal year from ad valorem tax sources, or an estimate of such revenue if the actual total available revenue cannot be determined; (2) The amount of revenue lost to the City for the current fiscal year by virtue of exemptions previously granted, or an estimate of such revenue if the actual revenue lost cannot be determined; (3) An estimate of the amount of revenue which would be lost to the City for the current fiscal year if the exemption applied for was granted had the property for which the exemption is requested otherwise been subject to taxation; and (4) A determination as to whether the property for which an exemption is requested is to be incorporated into a New Business or the Expansion of an Existing Business, or into neither, which determination the Property Appraiser shall also affix to the face of the application. Upon request, the Department will provide the Property Appraiser such information as it may have available to assist in making this determination. (b) Eligibility Criteria – New business or the expansion of an existing business, as set forth below per F.S. 196.1995: 7 Ordinance No. 8346 -13 New Business Manufacturing A business or organization establishing 10 or more new jobs to employ 10 or more full -time employees in this City, which manufactures, processes, compounds, fabricates, or produces for sale items of tangible personal property at a fixed location and which comprises an industrial or manufacturing plant. Targeted Industry A business or organization establishing 10 or more new jobs to employ 10 or more full -time employees in this City, which is a target industry business as defined in F.S. 288.106(2)(q). Business with Sales A business or organization establishing 25 or more new jobs to employ 25 or more full -time employees in this City, the sales factor of which, as defined by F.S. 220.15(5), for the facility with respect to which it requests an economic development ad valorem tax exemption is less than 0.50 for each year the exemption is claimed. Office An office space in this City owned and used by a business or organization newly domiciled in this state; provided such office space houses 50 or more full -time employees of such business or organization; provided that such business or organization office first begins operation on a site clearly separate from any other commercial or industrial operation owned by the same business or organization. Annexed Property A business or organization that is situated on property annexed into the City and that, at the time of the annexation, is receiving an economic development ad valorem tax exemption from the county under F.S. 196.1995 Expansion of an Existing Business Manufacturing A business or organization establishing 10 or more new jobs to employ 10 or more full -time employees in this City, which manufactures, processes, compounds, fabricates, or produces for sale items of tangible personal property at a fixed location and which comprises an industrial or manufacturing plant. Targeted Industry A business or organization establishing 10 or more new jobs to employ 10 or more full -time employees in this City, which is a target industry business as defined in F.S. 288.106(2)(q). Business with Sales A business or organization establishing 25 or more new jobs to employ 25 or more full -time employees in this City, the sales factor of which, as defined by 8 Ordinance No. 8346 -13 F.S. 220.15(5), for the facility with respect to which it requests an economic development ad valorem tax exemption is less than 0.50 for each year the exemption is claimed; provided that such business increases operations on a site located within the City co- located with a commercial or industrial operation owned by the same business or organization under common control with the same business or organization, resulting in a net increase in employment of not less than 10 percent or an increase in productive output or sales of not less than 10 percent. Office An office space in this City owned and used by a business or organization newly domiciled in this City; provided such office space houses 50 or more full -time employees of such business or organization; provided that such business or organization office first begins operation on a site clearly separate from any other commercial or industrial operation owned by the same business or organization. Annexed Property A business or organization that is situated on property annexed into the City and that, at the time of the annexation, is receiving an economic development ad valorem tax exemption from the county under F.S. 196.1995. (c) Economic Development Policy Guidelines — In making its determination as to whether to grant the Exemption, and, if granted, the duration and percentage of the Exemption, the Council shall consider the following factors: (1) Number of current and projected employees of the Business located in the City (2) Average Wage of Employees of the Business located in the City. Applicants must pay no less than the Qualifying Average Annual Wage. (3) Amount of Capital Investment. Applicants must invest no less than $100,000. (4) Innovative Business (5) Environmental Impact (6) Commitment to Local Procurement (7) Net positive contribution to the local economy (8) Sales factor In addition to the above factors, the Council may consider any such other activity or factor that promotes the sustainability of Economic Development within the City. (d) Ordinance — After consideration of the Application and the Property Appraiser's review, the Economic Development Policy Guidelines, and such other information it deems relevant, the Council may choose to adopt an ordinance granting the Exemption to the Applicant for up to 75 percent of the assessed value of the qualifying property for up to 10 years. If granted, the ordinance shall include the following information: 9 Ordinance No. 8346 -13 (1) The name and address of the New Business or the Expansion of an Existing Business; (2) The name of the owner(s) of the New Business or the Expansion of an Existing Business; (3) The total amount of revenue available to the City from ad valorem tax sources for the current fiscal year, the total amount of the revenue lost to the City for the current fiscal year by virtue of exemptions currently in effect, and the estimated amount of revenue attributable to the Exemption granted to the new or expanding business; (4) The expiration date of the Exemption, which is (10) ten years or less (depending upon the duration of the Exemption granted) from the date the Council enacts the Ordinance granting the Exemption; and (5) A finding that the business meets the definition of a New Business or an Expansion of an Existing Business as set forth in §29.205(b) herein. Sec. 29.206. Application Fee. No fees shall be charged for processing the Exemption Application or any Exemption Ordinance adopted by the Council. Sec. 29.207. Continuing Performance (a) Change in ownership (1) The Business granted the Exemption shall be required to inform the Council in writing within ten (10) days as to any changes in ownership of the Business granted an Exemption. (2) Failure of the Business granted an Exemption to notify the City in writing of any such changes in ownership is cause for revocation of the Ordinance granting the Exemption, at the Council's discretion. (b) Annual Filings The Applicant shall be required to submit an Annual Renewal Statement and an Annual Report to the Economic Development and Housing Department on or before March 1st of each year for which the Exemption was granted. The Applicant shall also timely comply with all filings required pursuant to Section 196.011, Florida Statutes. 10 Ordinance No. 8346 -13 (1) The Annual Report shall certify that information provided in the original Application has not changed. (2) The Annual Report shall provide a report on the status of the Business, evidencing satisfaction of the Business Maintenance and Continued Performance conditions set forth in the Application. Sec. 29.208. Council Revocation. Should any Business granted an Exemption pursuant to this Ordinance fail to file the Annual Renewal Statement and /or Annual Report with the Council on or before March 1st of each year the Exemption has been granted as required in Sec. 29.207 of this Ordinance, fail to continue to meet the definition of a New Business or an Expansion of an Existing Business as set forth herein, fail to timely file a written report of change of ownership and /or fail to file a new Application upon any other change in the information provided in the original Application , and /or fail to fulfill any other representation made to the Council during the Application process, including the creation and maintenance of the total number of new jobs identified by a business in the Application, the Council, may, upon 30 days written notice to the respective Business, adopt an ordinance revoking the ad valorem tax exemption or take such other action with respect to the Exemption it deems appropriate. (a) Notification — Upon Revocation, the Council shall immediately notify the Property Appraiser. (b) Recover Taxes — If it is determined that for any year within the Exemption period the owner was not entitled to receive such Exemption, the owner of the property shall be subject to the taxes exempted as a result of such failure plus annual interest at the maximum rate allowed by law. (c) Reapply — Nothing herein shall prohibit a business from reapplying for an ad valorem tax exemption pursuant to State law. Sec. 29.209. Severability. If any provision of this article or the application thereof to any person or circumstance is held invalid, the invalidity shall not affect other provisions or applications of the act which can be given effect without the invalid provision or applications. To this end, the provisions of this article are declared severable. Sec. 29.210. Sunset Date. Pursuant to Section 196.1995, Florida Statutes, this Ordinance shall expire on November 6, 2022, ten (10) years after the date such authority to grant 11 Ordinance No. 8346 -13 Economic Development Ad Valorem Tax Exemptions was approved by the electors of the City voting on the question in a referendum. No business shall be allowed to begin receiving such Exemption after that date; however, the expiration shall not affect the operation of any Exemption for which a business has qualified under this Ordinance prior to November 6, 2022. Section 2. This Ordinance shall become effective immediately upon adoption. PASSED ON FIRST READING November 7, 2013 PASSED ON SECOND AND FINAL READING AND ADOPTED Countersigned: - eoite c' e e k$5 George N. Cretekos Mayor November 20, 2013 CITY OF CLEARWATER, FLORIDA By: 414, %e / Joa -e Ne ld Fr• William B. Home II City Manager Approved as to form: Attest: Akin City Attorney LL Rosemarie Call City Clerk 12 Ordinance No. 8346 -13