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19901218 1990-31ORDINANCE NO. 1990-31 AN ORDINANCE AMENDING CHAPTER 8 OF THE CODE OF THE CITY OF FAIRFAX, VIRGINIA BY ADDING THERETO A NEW ARTICLE XIII, CONSISTING OF SECTIONS 8-78 THROUGH 8- 90, REGARDING PARTIAL REAL ESTATE TAX EXEMPTION FOR CERTAIN SUBSTANTIALLY REHABILITATED COMMERCIAL AND MIXED USE STRUCTURES. BE IT ORDAINED by the City Council of the City of Fairfax, Virginia, that Article XIII, Chapter 8 of the Code of the City of Fairfax is hereby added to read in its entirety as follows: ARTICLE XIII. PARTIAL REAL ESTATE TAX EXEMPTION FOR SUBSTANTIALLY REHABILITATED COMMERCIAL AND MIXED USE STRUCTURES Section 8-78. Definitions. For the purposes of this article, the following words and phrases shall have the meanings respectively ascribed to them by this section: Assessor: Real Estate Assessor for the City of Fairfax. Base Value: The assessed value of the structure as of January 1 of the year in which the rehabilitation begins. Commercial Use: The selling or providing of goods or services to individuals, firms or corporations. Such use includes mixed use structures (used for both residential and commercial purposes) predominantly used for commercial purposes. Exemption: The real estate taxes resulting from the increase in the assessed value of a commercial structure attributable to the substantial rehabilitation thereof. no case shall an exemption be permitted if the assessed value falls below the base value in any given year. In Exemption District: The Old Town Fairfax Historic Overlay District and the Old Town Fairfax Transition Overlay District as defined in Sections 26-202 and 26-211 of this Code. Owner: Ail persons or entities holding title to the real estate, structure or structures thereon for which an exemption is requested. Substantially Rehabilitated Commercial Structure: An existing structure, no less than twenty-five (25) years of age, which has been substantially improved so as to increase the assessed value thereof by not less than thirty (30) percent and which structure is used for commercial use. 1 1990-31 Section 8-79. Partial Tax Exemption for Substantially Rehabilitated Commercial and Mixed Usn Structures - Policy and Intent. It is the purpose of this article to implement the provisions of Article 3, Chapter 32 of Title 58.1 of the Code of Virginia to permit the City to allow a partial tax exemption for substantially rehabilitated commercial structures. The exemption will provide an economic incentive for improvement of such real estate and will prevent the deterioration and vacation thereof which is harmful to the health and welfare of the City. This article provides a procedure for owners within certain designated areas in the City of Fairfax to obtain partial real estate tax exemptions for substantially rehabilitated commercial structures. Section 8-80. Eligibility. Any owner of real estate upon which there exists a structure of no less than twenty five (25) years of age, proposed to be substantially rehabilitated for commercial use, and located, in whole or in part, within the boundaries of the exemption district shall be eligible to apply for an exemption. Section 8-81. Application Procedure and Processing Fe~. (a) Applications for exemptions shall be filed with the City Manager or his designee on forms provided for such purpose. A separate application shall be submitted for each structure for which an exemption is requested. (b) The appropriate building permits shall be acquired prior to the filing of the application and the beginning of the rehabilitation. (c) The City Manager or his designee may require the applicant to submit all documentation deemed necessary to establish eligibility for an exemption. All such requested documentation shall be furnished to the assessor before an application will be considered complete and will be processed. (d) A processing fee of twenty dollars ($20.00) shall be paid to the City with each application. (e) The exemption shall not automatically attach to commercial use structures. Exemptions shall be granted only after the requirements of this article have been satisfied. Section 8-82. Inspections, Notification to Assessor. (a) Upon receipt of a completed application for an exemption and immediately prior to commencement of the proposed rehabilitation, the assessor or his designee shall physically inspect the structure. (b) After the initial inspection, the assessor or his designee shall annually inspect the structure to determine the progress of the rehabilitation. (c) An owner shall promptly notify the assessor in writing when the rehabilitation of the structure is complete. 2 1990-31 (d) During the period between the receipt of a completed application and completion of the rehabilitation, the structure shall be subject to taxation upon the full assessed value thereof. (e) No structure shall be eligible for an exemption if the assessor or his designee have been denied access to any portion thereof, either before, during or after the rehabilitation for which an exemption is requested, which access is for the purposes of assessing the structure and determining whether the requirements of this article have been met. Section 8-83. Commencement of Exemption, Land Books. (a) The exemption shall commence upon completion of the rehabilitation, inspection thereof by the assessor or his designee, verification by the assessor or his designee that the rehabilitation described in the application has been fully completed, and a determination by the City Manager or his designee that the requirements of this article have been met. (b) Nothing in this article shall be construed to permit the assessor to list upon the land books any reduced assessed value due to the exemption created by this article. Section 8-84. Amount, Duration, Schedules, Retail Criteria. (a) The amount of the exemption shall be determined in accordance with the definition thereof in Section 8-78 and schedules in this section. (b) The increase in assessed value attributable to the rehabilitation shall be applicable only to any subsequent assessment or reassessment after completion of the rehabilitation. An increase in an assessment occurring after the first year of the exemption shall not result in an increase in the exemption. (c) The exemption shall run with the real estate for a period of ten (10) years according to the following schedules: Year Amount of Exemption For Structures Meeting Retail Criteria in (d) Amount of Exemption For Structures Not Meeting Retail Criteria in (d) First through Fifth 100 % 50% Sixth 83% 42% Seventh 67% 34% Eighth 50 % 25% Ninth 33% 17% Tenth 17% 9% (d) The retail criteria are: (1) At least seventy five (75) percent of the gross square footage of the street level floor or floors of the structure are used for retail purposes. (2) As used in this section, the term "retail" means the sale of merchandise, food, beverages or lodging for use or consumption by the immediate purchaser. 1990-31 Section 8-85. Commercial Use of Structure Required. The exemption shall be available to an owner so long as the substantially rehabilitated structure is used for commercial use. Section 8-86. Vacant Land, Demolition and Replacement of Existing Structures. (a) No improvements made upon vacant land shall be eligible for an exemption under this article. (b) As used in the article, the terms "rehabilitation,, or "rehabilitated,, do not include situations in which a structure has been completely demolished or the gross floor area of a structure has been reduced by greater than seventy five (75) percent. Section 8-87. Assessment Methods. In determining the base value and any increase in the assessed value of a substantially rehabilitated structure, the assessor shall employ customary and generally accepted methods of real estate assessment. Section 8-88. Rules and Requlations. The City Manager or his designee may prescribe rules and regulations, consistent with this article, deemed necessary for the effective administration hereof. A copy of any such rules and regulations shall be available upon request in the office of the City Manager or his designee. Section 8-89. Other Laws and Ordinances. Nothing in this article shall be construed to relieve an owner or any other person or entity from complying with all other applicable laws and ordinances related to the development, use, rehabilitation or taxation of real estate. Section 8-90. Applicability to Rehabilitation Commencing Before Enactment of Ordinance. An owner may apply for an exemption if a building permit for the proposed rehabilitation was issued on or after January 1, 1989 and the work authorized by such permit was completed, as determined by the Building official, on or after January 1, 1990. This ordinance shall become effective as provided by law. INTRODUCED : ~_.~ ,I, /¢ ~ o PUBLIC HEARING: ~~~ /f, /~ go ADOPTED ATTEST: ~ C~y Clerk