All incentives are calculated based on the quality of the jobs and the amount of the capital investments. The factors examined in relation to the quality of the jobs include wages and fringe benefits. The capital investments are examined relative to the impact on tax revenues.

Potential Tax Abatements, Reductions, Refunds, and Credits (PDF)

Corpus Christi is a Section 4A sales tax community that enables the community to provide incentives that may include, but are not limited to:

• Land, facilities, equipment & infrastructure grants
• Loan participation/guarantees
• Direct low interest loans
• Rent subsidies
• Relocation and moving expense reimbursements
• Job training grants/loans

Chapter 380 Economic Development Program. The City of Corpus Christi will, on an individual merit basis, give consideration to providing economic incentives to a company in accordance with the Corpus Christi Chapter 380 Economic development Program Policies and Procedures as authorized by Chapter 380 of the Texas Local Government Code, as amended from time to time.

Chapter 380 Program requirements:

A. To be considered for incentives as a Chapter 380 Economic Development Program under these Policies and Procedures, a project must at least meet the following minimum requirements:

1. Either the project

a. will result in a minimum increased taxable value for the City of $25,000,000 in real and business personal property (excluding inventory and supplies); or

b. will result in the retention of at least 500 full-time permanent jobs and each job shall pay at least a “living wage.” For the purposes of this Program “living wage” shall mean that annual amount determined by the U. S. Department of Health and Human Services for the Corpus Christi area as being at the poverty level for a family of three, divided by 2,080 hours per year; and

2. In addition, the project

a. will make a unique or unequaled contribution to development or redevelopment efforts in the City of Corpus Christi, due to its magnitude, significance to the community or aesthetic quality; or

b. will enhance the City’s fiscal ability to provide high quality municipal services for the safety, comfort and enjoyment of Corpus Christi residents.

B. A project shall not be eligible for incentives under these Policies and Procedures if a building permit has been issued for the project prior to making application in accordance with these Policies and Procedures, except a project providing job retention as set forth in 1. b. above.

C. Incentives provided in accordance with these Policies and Procedures will be provided only to the extent that the revenue realized by the City and attributable to a project exceeds a minimum amount established by the Agreement. The public benefit or amount of revenue realized by the City and attributable to the project must be commensurate with value of any incentives granted under this Program.

Additional factors to be considered by the City Council in determining whether to authorize an Agreement for incentives as a Chapter 380 Economic Development Program (Program) are:

A. the number and types of jobs to be created or retained;

B. the financial capacity of the applicant to undertake and complete the proposed program;

C. other incentive programs for which the applicant has applied or is qualified;

D. the market conditions and growth potential for the business activity, and

E. any other factors the City Council finds helpful and relevant to accomplishing the City’s economic development objectives.

City Industrial Districts. Properties in the Industrial District pay a reduced rate in lieu of taxes as shown below:

Land: Payment, in lieu of taxes, at 100% of the assessed land value
Improvements: Less than $3,000,000 cumulative value: 60% of normal City tax.
Improvements: More than $3,000,000 cumulative value: 60%; taxed in incremental amounts until 60% cap is reached.

Protection From Annexation: Land of businesses in the ID that have an Industrial District Agreement is protected from annexation for ten years.
Zoning/Permitting: Businesses in the ID are exempt from zoning and permitting requirements. In addition platting may be waived if the seller submits for approval by the City Council a site plan, both the buyer and seller enter into agreement that if buyer’s use of the property materially changes platting shall be required and seller remains solely responsible for any payments in lieu of taxes unless the buyer enters into a supplemental ID contract with the city.
Most Favored Nations Clause: Provides that all entities in the ID must be treated alike. Therefore if one entity receives a benefit that benefit must be extended to all other parties in the ID.
Term: Ten years.

The two industrial districts are below:

Industrial District 1

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Industrial District 2

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Non-Industrial District Tax Abatements. The City of Corpus Christi may provide tax abatements to qualified facilities outside Industrial Districts. These facilities must be a basic manufacturing or service facility, regional distribution center, regional telecommunications/data processing center, regional visitor/amusement facility, enterprise zone residential redevelopment facility, central business district residential facility, petrochemical facility or a Renewal Community facility which are considered on a case-by-case basis. Abatements may be granted for new facilities and improvements to existing facilities for the purpose of modernization or expansion.

Basic Manufacturing or Service Facility means buildings and structures, including fixed machinery and equipment used or to be used for the production of products or services which derive a majority of revenue from points beyond a 50 mile radius of Nueces County (“Primary” employer).

Added Value means the increase in the assessed value of an eligible property as a result of “expansion” or “modernization” of an existing facility or construction of a “new facility”. It does not include deferred maintenance.

The abatement percentages for basic manufacturing or service facilities, petrochemical facilities, regional telecommunications/data processing centers, and regional visitor/amusement facilities are as follows:

Projects must add a minimum $2 million to the property tax rolls or $250,000 for a rehabilitation project

Tax Abatement Schedule for Renewal Community Projects are as follows:

Projects must create one full time permanent job per $50,000 in added value and maintain the job(s) during the term of the agreement. A minimum of $250,000 of added value is required for rehab projects.

State Enterprise Zone. Such zones are allocated every two years by the State. Communities are assigned “slots” that may be used depending on proposed investment and job creation. The slots are not guaranteed and the total “slots” available every two years are on a first come basis. The company may be eligible for a refund of sales tax paid. The level of refund is based on the level of proposed investment and jobs retained or created over a period of 3-5 years. Application for Enterprise Zone benefits are due September 1st, December 1st, March 1st, and July 1st, until all “slots” are assigned. The Enterprise Zone parameters and refund schedule follows:

Renewal Community. This is a designation by the U.S. Department of Housing and Urban Development and provides Federal tax reductions for job creation, retention, and investment. This provides an annual wage tax credit of up to $1,500 for every employee that lives and works in the Renewal Community (specific geographic area within the city). Renewal Community projects also can receive a tax abatement between 75%-100% if five or more jobs are created. Commercial buildings in the Renewal Community are also able to take advantage of an accelerated depreciation schedule (as short as 10 years or 50% option) depending on the allocation to the city. Investors in Renewal Community businesses will, also have zero capital gains if they purchase stock or partnership interest in the Renewal Community business.

Details

The Corpus Christi Renewal Community area is the following Census Tracts: 1, 3, 4, 5, 7, 10, 11, 13, 35 and 50. The federal legislation authorizing the Renewal Community Program expires on December 31, 2009.

Renewal Community Tax Credit

• $1,500 federal tax credit for each employee that lives and works in the Renewal Community (15% of first $10,000 of qualified wages).
• Employee must work for at least 90 days
• Full-time and part-time employees are eligible.
• Sin industries are excluded (liquor stores (but beer stores qualify), massage parlors, etc.)

Renewal Community Business

• Zero percent capital gains (if property held for more than five years before sale)
• 35% of employees are residents of the area
• Substantial portion of products/services used/consumed in the area
• Designation is competitive; only 85 slots are available state-wide every two years, of these slots Corpus Christi is allocated six slots, smaller cities such as Ingleside may have four slots.
• $2,500 sales tax refund per new or retained job with limitations on refund amounts based on amount of capital investment.

Commercial Revitalization Deduction

• The major Renewal Community benefit.
• $12 million is allocated each year to Corpus Christi
• Corpus Christi has never fully allocated its annual $12 million allotment.
• Twenty-four (24) months to complete construction and place the building into service. 10% of the Renewal Community project’s costs must be incurred within 6 months of the deduction allocation to the company. The company then must finish the project in 18 months.
• Benefit – Can deduct (depreciate) 50% of building’s cost in year 1 and depreciate the remaining 50% over the next 39 years or deduct full cost over 10 years.

 Click Map to view larger image.

Texas Economic Development Act. Those businesses located in an investment zone or SIA, may be eligible for school tax abatement if the investment is a minimum of $30 million and 10 new jobs are created. The property valuation must exceed $30 million, after depreciation, over 10 years. The tax abatement is “backfilled” by the state so that there is no loss in revenue to the affected school district.

CAPCO Program. This new investment vehicle provides two hundred million dollars ($200,000,000) in new working capital for qualified start-up businesses in Texas. Thirty percent (30%) or sixty million dollars ($60,000,000) are assigned for use in SIAs (discussed above). Eighty percent (80%) of the payroll must been paid to Texas employees and the business must have no more than 100 employees at the time of funding.