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Tax abatements, infrastructure cost participation, development fee rebates and freeport tax exemption are all examples of incentives designed to reduce costs for new investors. In order to receive these benefits, companies are often obligated to create or retain a specified number of jobs, or secure a certain level of private investment. In addition, the amout and type of incentives vary with the location, size and economic impact of the project. Development
Incentives in Dallas |
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Development Incentives in Dallas
City of Dallas Public/Private Partnership Program
Our development incentives exist to provide job opportunities and investment in designated enterprise zones and commercial zones in the city. It is the intent of the City of Dallas to provide economic or financial assistance only when it is necessary to stimulate private investment. Accordingly, these programs are available when agreements between the City and private parties that are not tax-exempt are approved by City Council prior to private investment occurring. Projects seeking business incentives must provide written assurance that "but for" the incentives sought, the proposed project would be substantially altered such that the economic returns to the city would be reduced or the project would not otherwise occur in the city.
Tax Abatements
Temporary abatement of either real estate or personal property taxes. City staff may consider wage rates, Dallas resident employment, contracting with local and minority and women owned businesses, efforts to exceed minimum environmental regulations, community activities, and target industry projects when negotiating this incentive. Tax abatement for net new business personal property will require businesses to remain within the tax abatement reinvestment zone for twice as long as the duration of the abatement period. All tax abatements must begin by January 1 of the second calendar year following City Council authorization.Southern Dallas Enterprise Zones/Commercial Zone "S"
Minimum Eligibility- create/retain a minimum 25 jobs or investing $1 million for property improvements
Benefits- negotiated up to 90 percent abatement for ten years on real property improvement value or up to 50 percent abatement for 5 years on net new business personal propertyIn limited cases, Southern Dallas projects may be considered for a combination of both real and personal property tax abatement when the combined amount does not exceed 90 percent of the City taxes on total new improvement value.
Northern Dallas Enterprise Zones
Minimum Eligibility- create/retain a minimum 50 jobs and investing $2.5 million for property improvements
Benefits- negotiated up to 50 percent abatement for ten years on real property improvement value or up to 50 percent abatement for 5 years on net new business personal property.Central Business District/Zone "C"
Minimum Eligibility- create/retain a minimum 50 jobs or investing $2.5 million for property improvements
Benefits- negotiated up to 90 percent abatement for ten years on real property improvement value or up to 75 percent abatement for 5 years on net new business personal property.Northern Dallas Commercial Zone "N"
Minimum Eligibility- create/retain a minimum 100 jobs and investing $5 million for property improvements
Benefits- negotiated case-by-case.
Infrastructure Cost Participation
City pays some or all of required City infrastructure (within ROWs or easements dedicated to City). Participation is considered on a "case by case" basis up to a maximum of 50% of eligible costs and contingent upon funding availability. Participation above 30% requires City bidding procedures. City participation represents reimbursement of predetermined project costs once "inspected and accepted" by applicable City departments.Development Fee Rebates
"Case-by-case" rebate of City fees charged in the regulation of land development on a not-to-exceed basis. Rebate payable after Certificate of Occupancy and contingent upon funding availability.
ROW Abandonment Rebates and Credits
The City may provide a 25 percent rebate or credit against monetary fees charged by the City for abandonment of public right-of-way in Southern Dallas and our Enterprise Zones. Rebates payable after City issues a Certificate of Occupancy; credits are offset against the costs of constructing certain negotiated public improvements that are not otherwise required of the developer. This incentive is contingent upon funding availability. Click here for additional information about City of Dallas right-of-way abandonment.
Miscellaneous Provisions of the Public/Private Partnership Program
Non-Conforming Projects
Non-Conforming projects are considered on a case-by-case basis for high impact projects, unique developments and competitive situations where projects may receive competing offers of incentives. These projects require a simple majority vote of City Council in Southern Dallas and a 3/4 vote of City Council in the CBD and in Northern Dallas.High Impact Projects
Projects creating/retaining a minimum of 500 jobs with substantial capital investment. In addition, this status may be granted to major projects by Fortune 500, Manufacturers 400 or Global 500 listed firms.Unique & Special Developments
Projects that have a metro-wide market area, and bring significant outside income into the City's economy and/or non-residential projects located in blighted areas as defined by the reinvestment zone provision in the Property Redevelopment and Tax Abatement Act.Competitive & Retention Projects
In special cases, companies receiving competing offers of incentives or those currently located in the city of Dallas considering a relocation/expansion are eligible to apply for financial incentives with negotiable terms. Incentives may be offered in specific cases to "match other offers." Companies may be required to demonstrate competing cities, offers, land/lease costs, taxes at current rates, utility rates, relocation costs, other significant costs and "gap" to be filled, etc.Target Industry Projects
Target Industry projects are generally defined as follows: Brownfields or recycling, medical and high tech. Target Industry projects must be confirmed in advance by the City in order to receive consideration under this designation.
Other Sources of Financial Assistance
Tax Increment Financing Districts/Public Improvement Districts
These special districts can be used to enhance infrastructure and services for neighborhoods primarily in and around downtown. These financial contributions are used to make development projects financially feasable, to enhance basic infrastructure and services, and to encourage developers to invest in these neighborhoods. The result is increased property values for residental and commercial properties alike. For more informaton, click here.Brownfields Program
This program provides assistance with redevelopment by coordinating the Brownfields Forum, a quarterly stakeholder meeting; conducting problem-solving meetings among developers, regulators (state and federal), and City development and permit staff; and providing Phase I Environmental Site Assessments for selected eligible properties. For more information, click here.
Grants and Loans
For qualified and approved businesses, the City may pursue loans and grants to promote local economic development.Freeport Exemption
The City of Dallas provides a property tax exemption on eligible goods "in transit"-those to be sent out of state within 175 days from acquisition to be assembled, stored, manufactured, processed or fabricated. Oil and natural gas do not qualify. Dallas County and the Dallas Independent School District also provide this incentive.Foreign Trade Zone
Allows duty-free importing of foreign-made components into the Zone, where they may be assembled, manufactured, processed or packaged. Duties are charged only when products are subsequently distributed into the U.S. market-if they are shipped to international markets, no duty is levied.
Points to Remember about Development Incentives in the Development Process
- Check with local government offices to determine who issues the permits you need. While you are doing that, ask if there are any rebates for fees paid if you take certain steps in the development process.
- Look at the state and/or federal level when financing a startup, relocation, or expansion. As is the case in Dallas, some local governments can facilitate the application process for incentives. Also try state departments of commerce and the federal government's Small Business Administration.
- Local economic development agencies and small business assistance centers can help you understand the taxes that might be levied on your business. Ask them what abatements might apply to your specific situation. You can also contact tax assessors to find out what taxes are usually levied on organizations in your industry.
- There are two main
types of real estate incentives: site improvement incentives and land/building
acquisition incentives. With site improvement incentives, you may receive
breaks for financing an infrastructure improvement. With land acquisition,
you must first purchase the land or building in order to receive special
financing and/or rebates. Try state level economic development agencies
for more information.
