SUBJECT: A motion to set a public hearing date for September 22, 2021 regarding the designation for the Chewy, Inc. Reinvestment Zone for tax abatement purposes.
RECOMMENDATION: A motion to set a public hearing date for September 22, 2021 regarding the designation of the Chewy, Inc. Reinvestment Zone for tax abatement purposes.
SPECIFIC EXPLANATION:
Section 312.002, Texas Tax Code requires cities to adopt tax abatement guidelines and criteria before entering into tax abatement agreements or designating an area as a reinvestment zone. That Section also provides that cities’ tax abatement guidelines and criteria expire after two years. City Council renewed the tax abatement guidelines and criteria on December 16th, 2020 by Ordinance No. 2020-1091. Chapter 312 allows tax abatement agreements within a designated reinvestment zone and requires that the City hold a public hearing before it can adopt an ordinance designating an area as a reinvestment zone.
On August 19, 2021, the Harris County Municipal Utility District No. 421 (“MUD”) sent a letter of intent to enter into a tax abatement agreement with Chewy, Inc. Since MUDs do not have the authority to create an abatement reinvestment zone, the MUD is requesting that the City create a tax abatement zone to facilitate the MUD’s tax abatement. There will be no direct financial impact to the City for this action since the MUD will be granting the tax abatement.
Chewy, Inc., (the “Company”) is proposing the development of a new regional e-commerce fulfillment facility. The project site will be the parcels identified with Harris County Appraisal District account numbers 0410530000090 and 0410530000067. The Company plans to invest approximately $100 million to develop the Project, which will include $50M for building purchase and improvements, $3M for leasehold improvements, $46M for Machinery & Equipment and $1M for furniture and fixtures. The Company also intends to create 1,200 jobs.
The City has reviewed the Company’s tax abatement application. The proposed date of the public hearing is September 22, 2021. The hearing notice will be published in the Houston Chronicle 7 days prior to the public hearings as statutorily required in Chapter 312.201(d) of the Texas Tax Code.