STRATEGIC PRIORITY: Economic Development
AGENDA DATE: January 8, 2025
COUNCIL DISTRICT(S): All
DEPARTMENT: Office of Economic Development
EXECUTIVE: Robin Bentley
______________________________________________________________________
SUBJECT
Title
A public hearing to receive comments regarding the adoption of an amended City of Dallas Economic Development Incentive Policy for the period January 1, 2025 through December 31, 2026, and, at the close of the public hearing, authorize the adoption of the Economic Development Incentive Policy for the public purpose of promoting economic and community development and stimulating business and commercial activity in the City of Dallas, effective from January 1, 2025 through December 31, 2026, including (1) addition of a Small Business Program, including (a) a city-wide Small Business Assistance Program and (b) City Council-directed small business programs; (2) addition of an Innovation Program; (3) amendment of the South Dallas/Fair Park Opportunity Fund Program Statement; (4) amendment of the Southern Dallas Investment Fund Program Statement; (5) amendment of Neighborhood Empowerment Zone # 9 and Neighborhood Empowerment Zone #10; (6) amendment of the Community Development Plan; and (7) other minor updates and technical corrections - Financing: No cost consideration to the City
Body
BACKGROUND
The City Council unanimously authorized the adoption of the Economic Development Incentive Policy on January 25, 2023 by Resolution No. 23-0220. The Incentive Policy added new tools to institutionalize a living wage, streamline the process for smaller developers, create a new fund to address infrastructure challenges, and prioritize investment in specific target areas. On March 27, 2024, City Council authorized amendments by Resolution No. 24-0435 necessary to implement the 2024 Economic Development bond proposition, reflect recent changes to state law, make minor program updates and add cost recovery provisions, and implement general updates and clarifications.
The Economic Development Incentive Policy defines the conditions under which the City may approve economic development incentives as authorized under Texas Local Government Code chapters 373, 378, and 380 and Texas Tax Code chapters 311 and 312. Specifically pursuant to Texas Code Chapter 312, section III (subsections 1 and 2.1) of the Economic Development Incentive Policy serves as the City’s adopted guidelines and criteria governing tax abatements.
With City Council’s authorization of the current Economic Development Incentive Policy scheduled to expire on December 31, 2024, the City Council is required to hold a public hearing and renew the adoption of the guidelines and criteria governing tax abatements for a new two year-period.
Additionally, following the August 1, 2024 dissolution of the City’s Small Business Center (SBC) and realignment of certain SBC-related functions to the Office of Economic Development over the past four months, staff is now recommending updates and amendments to the Economic Development Incentive Policy that are necessary for the Office of Economic Development to fully assume administrative responsibility for those certain functions.
Staff is recommending the following changes to the Economic Development Incentive Policy:
(1) addition of a Small Business Program, including (a) a city-wide Small Business Assistance Program and (b) City Council-directed small business programs,
(2) addition of an Innovation Program,
(3) amendment of the South Dallas/Fair Park Opportunity Fund Program Statement,
(4) amendment of the Southern Dallas Investment Fund Program Statement,
(5) amendment of Neighborhood Empowerment Zone #9 and Neighborhood Empowerment Zone #10,
(6) amendment of the Community Development Plan to reduce the number of jobs required to be created by a non-profit project from 25 to 10 in alignment with the other negotiated incentives program requirements, and
(7) other minor and technical corrections.
These recommended changes will help to grow the capacity of small businesses and small real estate developers and will enable the Office of Economic Development to establish a one-stop incentive toolbox for businesses and real estate developers of all sizes.
The redlined Economic Development Incentive Policy is attached as Exhibit A.
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
On January 25, 2023, the City Council held a public hearing and, at the close of the public hearing, adopted the Economic Development Incentive Policy for the period January 1, 2023 through December 31, 2024, by Resolution No. 23-0220.
On March 27, 2024, the City Council authorized amendments to the Economic Development Incentive Policy for the period January 1, 2023 through December 31, 2024, by Resolution No. 24-0435.
On November 25, 2024, the South Dallas/Fair Park Opportunity Fund Board of Directors reviewed and unanimously approved the recommended amendment of the South Dallas/Fair Park Opportunity Fund Program Statement.
The Economic Development Committee was briefed by memorandum regarding this matter on December 2, 2024. <https://cityofdallas.legistar.com/View.ashx?M=F&ID=13585883&GUID=00693058-00D1-4BCF-A21D-743978E56AE9>
On December 11, 2024, the City Council authorized a public hearing to be held no earlier than 9:00 am on January 8, 2025, at which time any interested person may appear and speak for or against the adoption of the Economic Development Incentive Policy for the period January 1, 2025 through December 31, 2026, by Resolution No. 24-1811.
FISCAL INFORMATION
No cost consideration to the City.