The City Commission is requested to consider approval of a Tax Abatement Agreement with Del Papa Realty Holdings, LP. The Tax Abatement would allow Del Papa Realty Holdings, LP to build a distribution center to be located at the northwest intersection of I-45 and Century Blvd.

The Tax Abatement would allow Del Papa Realty Holdings, LP to build a distribution center to be located at the northwest intersection of I-45 and Century Blvd. The total investment, with property and construction, etc, will be close to $25 million. The construction and eligible equipment is expected to be roughly $18 million. Inventory, land, and personal property is not eligible and would have the Property Tax applied as normal. The request indicates new jobs to Texas City of 176 employees and $18 million in new construction. Based upon the Tax Abatement Guidelines of the City, Del Papa would be eligible for the following: Year 1 – 71%, Years 2-5 – 91%. This percentage is meeting the Economic Criteria of creating at least 10 new jobs in Texas City and having between $15 million and $20 million of new value (eligible for year 1 no abatement and years 2-5 up to 20% abatement), New Facility Construction Criteria (up to 70% for years 1-5), and Local Residency Criteria (up to 20% if the top 25 salaried employees reside in Texas City - in this case only 1 employee of 19 Texas City residents are within the top 25, so eligible for 1% for years 1-5).
A Tax Abatement Agreement shall not be authorized if it is determined that:
(1) There would be a substantial adverse effect on the provision of government service or tax base;
(2) The applicant has insufficient financial capacity;
(3) Planned or potential use of the property would constitute a hazard to public safety, health or morals;
(4) Violation of laws of the United States, State of Texas, or Ordinances of the City of Texas City would occur; or
(5) The application for tax abatement was submitted after the commencement of construction, alteration, or installation of improvements related to the new facility or structure, and/or the modernization or expansion of an existing facility or structure; or
(6) Pending litigation by applicant against the City of Texas City exists.
(7) Owner/Applicant is delinquent in the payment of City of Texas City taxes.
Staff has found none of the above to be true.
Attached is the Tax Abatement Agreement with application, site plan, survey, and rendering of the proposed distribution building.