Board of Directors Regular Meeting Agenda


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Meeting Date: 03/21/2019  

SUBJECT MATTER:
Receive, consider and act upon approval of a tax abatement agreement between The Woodlands Township, Alight Solutions LLC., and The Woodlands Land Development Company, L.P. (C-2019-0196);  
FISCAL IMPACT:
To be determined.
BACKGROUND:
The Woodlands Township adopted its current Tax Abatement Policy on January 16, 2019.  In line with past practice, the Board of Directors adopted a policy that contains the same terms and conditions as Montgomery County's tax abatement policy.  A copy of the Township's tax abatement policy, which was approved by Resolution No. 001-19, is attached.

The Township has received a tax abatement request from Alight Solutions (Alight) for a proposed new office building and parking garage to be located on New Trails Drive in The Woodlands.  The request from Alight is attached.  A preliminary site plan for the project is also attached.

In the past, the Township has not considered a tax abatement request until such tax abatement has first been approved by the County.  On February 26, 2019, Montgomery County Commissioners Court approved a tax abatement agreement with Alight and The Woodlands Land Development Company (TWLDC) wherein TWLDC will construct a new four-story office building of approximately 180,000 square feet and a parking garage of approximately 115,000 square feet and then lease the facilities to Alight for business operations.  The Application for Tax Abatement submitted by Alight to Montgomery County and the subsequent tax abatement agreement approved by Montgomery County are attached for reference.

Upon completion of the project, the total value of the land and improvements is estimated to be approximately $30.4 million ($27.0 million for the improvements and $3.4 million for the land).  Additionally, the project will generate business personal property with a value of approximately $4.0 million.  Alight is expected to directly retain 950 full-time jobs with an annual payroll of approximately $47.5 million.  

The Township's attorney has drafted an agreement that grants Alight Solutions and The Woodlands Land Development Company an abatement from ad valorem taxation by the Township to the same extent, for the same term, and subject to the same conditions and limitations as the previously referenced tax abatement agreement approved by Montgomery County Commissioners Court on February 26, 2019.  The abatement will be applied to the certified appraised value of the qualifying property that is in excess of the "base year value".  The base year value is defined as: (a) $3,453,980 for the real property (land); (b) $0 for the improvements; and (c ) $0 for the fixed personal property.  The base year value of $3,453,980 as well as the value of business personal property (other than fixed personal property) and inventory are not subject to the abatement and will be fully taxable.

Following is the proposed schedule for the Alight Solutions tax abatement:
 
Tax Year of Abatement Percentage of Taxes Abated
2020 100%
2021 100%
2022 100%
2023 100%
2024 100%
2025 100%
2026 100%
2027 80%
2028 60%
2029 40%

The draft tax abatement agreement between the Township, Alight and TWLDC is attached for review.

The Montgomery County Tax Assessor, Tammy McRae, has communicated to staff that she is preparing a memo that summarizes the potential tax impacts of the Alight tax abatement proposal.  Staff will distribute Ms. McRae's memo to the Board and post it online with the other abatement-related materials upon receipt.  
RECOMMENDATION:
Board to determine action.
Attachments
1. Township Tax Abatement Policy
2. Alight Solutions Abatement Request to the Township
3. Draft Tax Abatement Agreement between the Township, Alight and TWLDC
4. Approved Tax Abatement Agreement between Montgomery County, Alight and TWLDC
5. Application for Tax Abatement submitted by Alight to Montgomery County
6. Project Location Map - As provided by Founders Reserve HOA
Additional Materials - Tax Abatement


    

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