FORT WORTH -- Most companies receiving city tax abatements did not collect their full benefits in 2011 because they didn't hit employment targets set out in the deals.
As a result, businesses missed out on more than $900,000 in property tax reductions, money that instead went to the city, according to an annual audit report of tax abatement and economic development agreements."It speaks to the softness of the economy," said Robert Sturns, economic development manager. "That hurts their ability to meet the agreements. As we looked at each of these, the thing that stood out ... the ones tied to employment are the ones not hitting" the terms.Companies agree to create a certain number of jobs, hire a certain number of center-city residents and do a certain percentage of business with Fort Worth construction and minority- and women-owned businesses. In exchange, they are offered an abatement on a percentage of their property taxes, in some cases 100 percent. The City Council approves the deals.Of the 14 companies involved in active tax abatements deals last year, only the mixed-used GrandMarc at Westberry Place near TCU and the Omni Fort Worth Hotel downtown got the maximum abatement.If all the companies had hit their targets, they would have received a reduction in property taxes totaling a little more than $2.3 million. Instead, the companies received $1.4 million. That meant that the city received $1.2 million instead of the expected $359,530.The Chase Operations Center in CentrePort Business Park on the far east side, for example, has a deal for a 90 percent abatement, worth more than $303,000, but got 5 percent, or $16,853, last year.The city also awards economic-development, or Chapter 380, agreements that are much like property tax incentives but can go beyond 10 years. Those also carry employment and spending requirements and are geared for projects with large capital investments.Of 17 companies in Chapter 380 agreements, 13 got the full benefits last year; the rest narrowly missed the goal. For 2011, $13.9 million in taxes was collected on the projects, with $9.3 million going back in grants and the rest staying with the city.Sandra Baker, 817-390-7727Twitter: @SandraBakerFWSTHave more to add? News tip? Tell us
