HomeMy WebLinkAboutMCRA-R-10-0004 Backup 10-14-2010City of Miami
Legislation
Ordinance
City Hall
3500 Pan American
Drive
Miami, FL 33133
www.miamigov.com
File Number: 10-01057 Final Action Date:
AN ORDINANCE OF THE MIAMI CITY COMMISSION, GRANTING AN AD
VALOREM TAX EXEMPTION TO DDR MIAMI AVE, LLC, A NEW BUSINESS
LOCATED IN THE ENTERPRISE ZONE; PROVIDING SCOPE AND TERMS OF
EXEMPTION; PROVIDING FOR A SEVERABILITY CLAUSE, AN IMMEDIATE
EFFECTIVE DATE, AND AN EXPIRATION DATE.
WHEREAS, the City Commission recognized the need to stimulate economic development in
certain areas of the City of Miami ("City") which were and are economically depressed, where housing
and structural conditions were and are blighted and deteriorated, and where unemployment and
poverty were and are prevalent, said areas being designated "Enterprise Zones" as defined in Section
196.012 and Section 290.004, Florida Statutes; and
WHEREAS, pursuant to Article VII, Section 3 of the Florida Constitution, the State has enacted
Section 196.1995, Florida Statutes, providing a local government option for ad valorem tax exemption
to new businesses and expansions of existing businesses in each such Enterprise Zone; and
WHEREAS, the City Commission authorized Ad Valorem Tax Exemptions for Enterprise Zone
Businesses, for new businesses and for the expansion of existing businesses located in the Enterprise
Zone through Ordinance No. 12308, enacted on December 12, 2002, as amended; and
WHEREAS, the City Commission desired and desires to encourage economic growth and
development and alleviate the conditions of unemployment, economic disinvestments and poverty by
creating new construction, new jobs, and an enhanced business climate particularly for small or
minority owned businesses; and
WHEREAS, DDR Miami Avenue, LLC, hereinafter referred to as "Business", located at 3401
North Miami Avenue, Suite 132, Miami, FL 33127, within the City of Miami's Enterprise Zone No. 1301
had made an application for ad valorem tax exemption for the year 2007; and
WHEREAS, the Business committed to the City Commission that it would maintain a work
force of at least five (5) employees of whom at least twenty percent (20%) would be residents of the
Enterprise Zone; and
WHEREAS, the Business fulfilled its commitment of at least a five (5) employee workforce and
created five (5) new jobs, of which at least twenty percent (20%) were residents of the City's
Enterprise Zone; and
WHEREAS, the City finds that the Business has tax bills which are current; and
WHEREAS, the City finds that an ad valorem tax exemption is appropriate and consistent with
the public purpose to eliminate the serious and distressing economic conditions of the designated
"Enterprise Zone" in the City of Miami;
City of Miami
Page 1 of 3 File Id: 10-01057 (Version: 1) Printed On: 10/4/2010
File Number Y0'0YD57
NOW, THEREFORE, BE|TORDAINED BYTHE COMMISSION OFTHE CITY OFM|ANi
Section 1. The recitals and findings contained in the Preamble bothis Ordinance are adopted
by reference as if fully set forth in this Section.
Section 2. The City finds that in the year the Business applied for the ad valorem tax exemption
it was m "new business" as defined in Section 190.012(15) (b) Florida Statutes (1991) and as defined
in the Code of the City of Miami Florida, as amended ("City Code") Section 56-111, and after careful
consideration of certain factors including those enumerated in Section 56-113 of the City Code finds
and determines the Business ioeligible for advalorem tax exemption for the year 2OO7.
Section 3. The City hereby grants an ad valorem tax exemption pursuant to Article V of the City
Code, enacted ODDecember 12.2DO2.@samended, toOORMiami Ave, LLC'located 8t34O1 North
Miami Avenue, Suite 132, Miami, FL 33127, a "new business." The exemption shall be granted in
accordance with subsection 56-112 of the City Code for the eligible assessed value of the
improvements to real property and the eligible tangible personal property acquired and owned by the
Business located at34O1 North Miami Avenue, Suite 132.Miami, FL33127.
Secton4.11le exemption shall apply only hothe City'smunicipal nliUage and shall not apply to
taxes levied for payment mfbonds ortotaxes authorized bvvote ofthe electors pursuant bnSection
9(b) of Section 12, Article VII of the State Constitution. The exemption shall not be prolonged or
extended by virtue of any sale of the Business receiving the exemption. The total amount ofrevenue
available tothe City from advalorem tax sources for Fl^2OOT-O8was $285,O49.884.The total amount
of revenue foregone by the City for FY 2007-08 by virtue of Enterprise Zone Ad Valorem Tax
Exemptions was $O.0O.The revenue foregone bythe City for FY2O1O-2011attributable tothe
exemption ofthe Business named inthis ordinance is estimated at$1O&.00for real/tangible personal
property, based on 2007 City millage rate, assessed by the Property Appraiser of Miami -Dade County.
This amount represents 100% of the eligible tax exemption and such amount shall be applied as a
credit towards taxes levied oDthe Business for year 2O1D.
Section 5. The duration of the Ad Valorem Tax Exemption for Enterprise Zone Businesses
granted tothe Business is one (1)year. The tax exemption granted iOthis ordinance shall expire after
the 2O1Otax assessment rolls mfMiami-Dade County.
Section 0. If any meotoO, subsection, sentence, clause or provision of this ordinance is held
invalid, the remainder of this ordinance shall not be affected by, such invalidity.
Section 7.This Ordinance shall sunset one /1\year from its effective date.
Section 8.This Ordinance shall become effective immediately after final reading and adoption
thereof. {1l
APPROVED AST3FORM AND CORRECTNESS:
JUL|EO.BRU
CITYATTORNEY
City of Miami Page JvyJ File Id. }V-0VVJ7/Mnrsiow'/)prinmdOn: }01412o/x
File Number: 10-01057
Footnotes:
{1} This Ordinance shall become effective as specified herein unless vetoed by the Mayor within
ten days from the date it was passed and adopted. If the Mayor vetoes this Ordinance, it shall
become effective immediately upon override of the veto by the City Commission or upon the
effective date stated herein, whichever is later.
City of Miami Page 3 of 3 File Id: 10-01057 (Version: 1) Printed On: 10/4/2010
CITY OF MIAMI, FLORIDA
INTER -OFFICE MEMORANDUM
TO: Honorable Mayor and Members of DATE: FILE:
the City Commission
SUBJECT: Ordinance Granting Enterprise Zone
Ad Valorem Tax Exemption Under
Ordinance 12308 DDR Miami Ave
LLC
-r‘a'
FROM: Carlos A. Migoya REFERENCES:
City Manager/Chief Administrator
ENCLOSURES:
RECOMMENDATION:
It is recommended that the City Commission approve the attached ordinance granting an Enterprise Zone Ad Valorem
Tax Exemption to DDR Miami Ave LLC, hereinafter referred to as "Business," pursuant to the provision of Section
196.1995, Florida Statutes, and City of Miami Ordinance 12308.
BACKGROUND:
On 7 March 2002, the City Commission passed Ordinance 12308, Ad Valorem Tax Abatement on its first reading.
This ordinance authorizes the City Commission to grant Ad Valorem Tax Exemptions to new and/or expanding
business located in the Enterprise Zone (EZ). This exemption is meant to stimulate economic development and
growth, while alleviating conditions of unemployment and the lack of investments in economically depressed areas
within the EZ. Chapter 56 ("Taxation"), Code of the City of Miami was amended to include Article V, entitled Ad
Valorem Tax Exemption for Enterprise Zone Businesses.
Although the City Commission has the discretion to grant the exemption, it is contingent upon the new or expanding
business fulfilling their proposed improvements in the same way it was presented at application. A new business is
defined as a business, located within the EZ, that begins operations on a site clearly separate from any other
commercial or industrial operation owned by the same business and which creates the required number of jobs
outlined in Section 56-113 of the 'Jove mentioned Ordinance. An expanded business defined as a business,
located within the EZ that increases operations on a site co -located by the same business and creates the number of
jobs required in Section 56-113.
To be eligible for this exemption, new or expanded businesses shall create a minimum of five new full-time jobs. If in
any given year of the first 5-years of the exemption, 20% or more nf a business' permanent full-time employees are
residents n le Enterprise Zone, the exemption for that year will h 100% of the assessed value of all improvemeit
to real property and 100% of the assessed value of all tangible personal property. In case the business cannot
comply with the 20% residency requirement of their employees living within the Enterprise Zone, then the exemption
for that year will be 50% of the assessed v4lue of the improvements to real estate and improvements to tangible
personal property.
The Honorable Mayor and Members
ofthe City Commission
Page 2—
This exemption is for the City'smunicipal millamaand does not apply to taxes levied for payment of bonds or taxes
authorized by vote of the ehsob»ns or the Constitution of the State of Florida. This exemption will not be available in
areas where its application would cause undue hardship to the City's debt or pledged revenues. Since all Community
Redevelopment Areas (CRA) are located within Us, this also applies to businesses located within CRAs.
The granting and the bgnn of the exemption shall be determined by the City Commission, in its ao|a discretion. If the
term of the extension is granted for more than one year, than the tax exemptions are granted in 1 year inonarnento, for
upto1Oyears, but must berenewed annually byMarch st . The business must file arenewal application with City of
&8|anni, who is responsible for auditing the business to ensure the requirements for the exemption are eUU being met.
Failure to file a renewal application will constitute a waiver for the exemption for that year. |fthe business iafound not
to be in compliance with the eligibility nequirenlenta, it will be required to pay the tax exemption along with any interest
that accrued at the maximum rate o||ovved by law.
The authority ofthe City Commission b» grant tax exemptions will expire1Dyears from the date ofthe referendum
granting the authority. The expirationwill not affect the business' unexpired tennoYonyeranmcdionnynnmininginmffact
as of the expiration date ofthe referendum.
Detailed information regarding the business is provided below. This exemption is based on the City'n Fiscal Year
2007 municipal miUoQe rate of7.2S99. which is the year the buo}naoo became eligible for the tax exemption. Due to
procedural errors with the original ordinance 12308. the City has been unable to approve any ad wm|0reyn tax
exemptions todate. However, ordinance 123D8has been amended tocorrect the procedural errors.
The Honorable Mayor and Members
of the City Commission
LLC
Address:
3401 N. Miami Avenue, Ste 132 &8ianli. FL 33127
Community Redevelopment Area /CRA\:
Yes
Business:
Retail/Other
Contact Person:
Jose Diaz: 305.7565828
Employment:
Five (5)Full-time Jobs
Basis ofApplication:
New Business
Assessed Value of Improvements:
$151200
Exemption Eligibility:
$O (real property)
$337 (tangible personal property)
Estimated City:
$O (real property)
Tax Exemption Per Year
$108 (tangible personal property)
Period:
1 Year
ECONOMIC
K8PACT ANALYSIS
If the full exemptionia granted,the impact onthe City budget would reduce revenues for FY'1Obv$1OSbased onthe
FY2OD7City rniUagerate, since such amount would boapplied omocredit bzthe FY2D1Otaxes levied onthe
business.
The impact ofthe exemption onthe privatemeotorietoraduuetheappUoonyaopeuxbng000tsbvUleoeamnounts.
which is intended as an incentive to invest and create jobs in the most distressed areas of the City. The business
created Five (S) new jobs, which include a total of1held byresidents mf the Enterprise Zone. Exemption
recipients are monitored for compliance with maintaining otleast five new full-time jobs as required by ordinance.,
Businesses found not to be in compliance with maintaining five new full-time employees will lose their tax exemption,
Company
Exemption
Term
Total Jobs
Created
GZ residents
Employed
Total Taxes
Levied on
Improvements
DC>RK8iann|
Ave
$109
1`fmor
5
1(2096)
$337
The initial cost of processing this application was $100 and the public benefits of this projectare the investment and
job creation in the Chv'omost economically distressed areas, The additional payroll and economic activity generates
other taxable activity, while assisting businesses in becoming successful and prosperous. This generates more
revenues for the City and provides an opportunity to increase services and programs for residents and business
owners.