Economic Development Basics - Texas Municipal League
Economic Development Basics - Texas Municipal League Economic Development Basics - Texas Municipal League
(1) Greater flexibility in negotiating and awarding contracts related to thedevelopment of a municipal project carried out by the corporation.Except in limited circumstances involving navigation districts, localgovernment corporations are not subject to Professional ServicesProcurement Act or competitive bidding requirements. [Transp. Code§ 431.101(e) and (g); Tex. Attorney General Opinion, JC-0335(2001)].(2) One or more governmental entities may contract under Chapter 431for a shared project. Chapter 431 puts all entities on an equal playingfield because they are each operating under the broad authoritygranted under Chapter 431. The local government corporationreceives funding from each entity in accordance with an agreementamong the entities, and a board carries out the project on behalf of theentities. The board may include members of the various governingbodies of the governmental units creating the corporation.(3) Local Government Code Chapter 334 and 335 authorizing sports andcommunity venue projects does not require or specifically provide forthe creation of a corporation as Tex. Civ. Statutes art. 5190.6, § 4Aand § 4B do. The city (or county) may choose to carry out all aspectsof a Chapter 334 or Chapter 335 project. However, in certaininstances, the city (or county) may find it beneficial to enter into acontract with a local government corporation to construct, own, leaseand/or operate a sports and community venue project. For instance,the city may prefer that the local government corporation issue bondsfor the project and act as the owner and lessor of a project.(4) If the city wants to transfer land to a local government corporation tocarry out a project on behalf of the city, Loc. Gov't Code § 253.011provides that land may be transferred to a nonprofit organization(such as a local government corporation) without complying with thenotice and bidding requirements of Loc. Gov't Code § 272.001(1) orother law provided the organization is required to use the property toprimarily promote a public purpose of the city, and provided that theproperty is conveyed by instrument that indicates the ownership of theproperty automatically reverts to the city if the nonprofit organizationat any time fails to use the property as required.d. Examples of current uses of local government corporations.(1) Two cities created a local government corporation to acquire,construct and operate a water utility system.(2) Four cities and a county created a local government corporation toown, fund and operate a performing arts facility.(3) A county created a local government corporation to contract with asports and community venue district for construction of a stadium foran NFL expansion franchise.(4) A city created a local government corporation to construct, operate,maintain and obtain project based financing for a convention centerhotel.(17)
(5) Tax Increment Reinvestment Zone (TIRZ or TIF) boards andMunicipal Management District boards sometimes choose to utilize alocal government corporation to manage revenues and project plans.The powers of the local government corporation are more clearlydefined and broader than the powers provided by statute for the taxincrement reinvestment zone board.3. Land as an Economic Development ToolIs a city or a 4A or 4B corporation authorized to use land as an economicdevelopment tool by donating or selling the land at a reduced price for economicdevelopment purposes?a. Notice and Bid Requirements(1) General Rule: Notice and bids are required before a politicalsubdivision (including a City) may sell real property unless the salefits within an exception. Tex. Loc. Gov't Code Ann. § 272.001(Vernon Supp. 2003).(2) Exceptions:(a)Tex. Loc. Gov't Code Ann. § 272.001(b)(1)-(7) (Vernon Supp.2004).(i)(ii)(iii)(iv)(v)(vi)narrow strips of land, or land that because of itsshape, lack of access to public roads, or small areacannot be used independently under its currentzoning or under applicable subdivision or otherdevelopment control ordinances;streets or alleys, owned in fee or used by easement;land or a real property interest originally acquiredfor streets, rights-of-way, or easements that thepolitical subdivison chooses to exchange for otherland to be used for streets, rights-of-way,easements, or other public purposes, includingtransactions partly for cash;land that the political subdivision wants to havedeveloped by contract with an independentfoundation;a real property interest conveyed to a governmentalentity that has the power of eminent domain;a municipality's land that is located in areinvestment zone designated as provided by lawand that the municipality desires to have developed(18)
- Page 3 and 4: 3. Land as an Economic Development
- Page 5 and 6: a. What is it? Sections 4A and 4B o
- Page 7 and 8: Other differencesA 4A sales tax may
- Page 9 and 10: (4) Parking Tax (§ 334.201)Imposed
- Page 11 and 12: c. How can the hotel occupancy tax
- Page 13 and 14: a. What is tax abatement? An exempt
- Page 15 and 16: delinquency that exceeds the fair m
- Page 17: That there will be a demonstrable b
- Page 21 and 22: for nonpayment of a public improvem
- Page 23 and 24: Attachment 1PRACTICE POINTERS:PUBLI
- Page 25: Attachment 2Notice and Hearing:Sect
(1) Greater flexibility in negotiating and awarding contracts related to thedevelopment of a municipal project carried out by the corporation.Except in limited circumstances involving navigation districts, localgovernment corporations are not subject to Professional ServicesProcurement Act or competitive bidding requirements. [Transp. Code§ 431.101(e) and (g); Tex. Attorney General Opinion, JC-0335(2001)].(2) One or more governmental entities may contract under Chapter 431for a shared project. Chapter 431 puts all entities on an equal playingfield because they are each operating under the broad authoritygranted under Chapter 431. The local government corporationreceives funding from each entity in accordance with an agreementamong the entities, and a board carries out the project on behalf of theentities. The board may include members of the various governingbodies of the governmental units creating the corporation.(3) Local Government Code Chapter 334 and 335 authorizing sports andcommunity venue projects does not require or specifically provide forthe creation of a corporation as Tex. Civ. Statutes art. 5190.6, § 4Aand § 4B do. The city (or county) may choose to carry out all aspectsof a Chapter 334 or Chapter 335 project. However, in certaininstances, the city (or county) may find it beneficial to enter into acontract with a local government corporation to construct, own, leaseand/or operate a sports and community venue project. For instance,the city may prefer that the local government corporation issue bondsfor the project and act as the owner and lessor of a project.(4) If the city wants to transfer land to a local government corporation tocarry out a project on behalf of the city, Loc. Gov't Code § 253.011provides that land may be transferred to a nonprofit organization(such as a local government corporation) without complying with thenotice and bidding requirements of Loc. Gov't Code § 272.001(1) orother law provided the organization is required to use the property toprimarily promote a public purpose of the city, and provided that theproperty is conveyed by instrument that indicates the ownership of theproperty automatically reverts to the city if the nonprofit organizationat any time fails to use the property as required.d. Examples of current uses of local government corporations.(1) Two cities created a local government corporation to acquire,construct and operate a water utility system.(2) Four cities and a county created a local government corporation toown, fund and operate a performing arts facility.(3) A county created a local government corporation to contract with asports and community venue district for construction of a stadium foran NFL expansion franchise.(4) A city created a local government corporation to construct, operate,maintain and obtain project based financing for a convention centerhotel.(17)
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