Location - Location - Location
Mineral Wells, Texas is the first stand-alone community west of the Dallas-Fort Worth Metroplex. Located only 45 minutes from downtown Fort Worth, Mineral Wells has easy access to both north-south and east-west highways. The countryside is inspiring, situated on the edge of the north Texas hill country and surrounded by lakes.
Strong Foundation Encourages Growth
- Lower Cost of Living - Mineral Wells Area Chamber of Commerce website
- Excellent School System - Mineral Wells ISD website
- Outstanding Regional Hospital / Healthcare Services - Palo Pinto General Hospital website
- Strong Rural Work Ethic (We don't have the corner on this, but our local industries will confirm it!)
Following is a list of incentives that are available. Click an incentive to open the package that contains it farther below.
- New Markets Tax Credits (NMTC)
- 20 Year Property Tax Reduction
- Freeport Inventory Tax Savings
- Texas Capital Fund Interest Free Loan
- Texas Enterprise Fund Grant
- Infrastructure Grant Funding
- Refund of Sales & Use Tax
Click the title of an incentive package below to open that section and learn more.
Texas Capital Fund Program
Texas Capital Fund Program
The financial incentives provided by Mineral Wells' utilization of the Texas Capital Fund are:
1) 20 year interest free financing
2) Loan styled as a lease;
a) Off balance sheet financing. Not required to show loan as L/T debt.
b) Company NOT liable for loan after administrative contract closing which occurs in first 3 years.
3) Substantial property tax savings on land and improvements for 20 years
The funds potentially available from the Texas Capital Fund Program (TCF) are restricted for use in either the acquisition/construction of real estate improvements, the acquisition of land, or the construction of public infrastructure to support an economic development project. The amount of funding is roughly based upon the number of jobs created or retained in the State of Texas times $15,000, $20,000 or $25,000 per job. Application scores increase as the cost per job decreases.
The TCF accepts applications all year as submitted. The TCF application is a joint endeavor between the company to be benefited and a City or County. The application requires certain information to be provided by the company, to include 3 years financials, 3 years tax returns, a 3 year quarterly financial forecast and an in-depth business plan. The requirements for an established, publically traded corporation may be different in terms of financial data to be submitted. The Area Growth Council works closely with the company, prepares the majority of the application, and supports the company in the collection of their required data.
It may be known within four weeks (or as long as eighteen months) of the application submission whether or not the TCF is going to process the application for possible funding. A successful application can expect funding within 90 to 150 days after the initial submission.
Mineral Wells is the largest user of the TCF's Real Estate Program. We only submit viable projects and have never not received funding for a submitted project.
In as much as most Companies desire to proceed with a project in the near future and dealings with a State agency like the Texas Capital Fund Program tend to take nine months to two years before funding is made available, a unique project structure is utilized by Mineral Wells to meet the Company's required time frames. See the Facility Acquisition/Renovation and Financing Overview.
An Example of How the TCF Works
A company anticipates expanding in the Mineral Wells / Palo Pinto County area. Their project includes the creation of 16 new full time positions and they have located an existing facility that will work for them. The property can be acquired for $360,000.
- The City / County & the company submit an application to the TCF, and the project is funded.
- The State would write a check to the City / County for $360,000.
- The City / County would write a check for $360,000 to the seller of the property (said seller can NOT be the Company being assisted) at the real estate closing and the City / County would then be the property owner.
- The City / County would lease the property to the Company for $1,500 per month ($360,000 – paid over 20 years at 0% interest), for a period of 3 years on a triple net basis. The company would have the option to extend the lease every 3 years with the same lease rate and terms. After 20 years, the company could acquire ownership of the property for one dollar.
- This amounts to twenty year interest free money that is true off-balance sheet financing. Since the company only signs up for 3 or 4 years at a time (there is no requirement to extend or renew the lease), the $360,000 debt is never shown on the company's balance sheet. Only the obligation for the 3 year lease is shown as a liability.
- Additionally, the State requires that property owned by a governmental entity (the City or County), and leased to a private entity (the company) be taxed (Texas Property Taxes) based upon the lease-hold value of the property rather than the appraised value. This State ruling is reduced to a formula which becomes unique for each property. The bottom line is the fact that the company potentially saves 20% to 40% on property taxes (on the land & improvements) during the time the property is leased from the City / County based upon current appraisal district handling of these types of properties.
An in-depth description of this program, its' requirements, application forms etc. can be reviewed at http://texasagriculture.gov/GrantsServices/RuralEconomicDevelopment/TexasCapitalFund.aspx
Overview of the Key Requirements of the Texas Capital Fund Program
Triple Net Lease – The Lessee is responsible for the taxes, maintenance and insurance on the facility.
Insurance – The Lessee must insure the facility for at lease the amount of the TFC award and carry at least $1,000,000 of liability insurance.
Sub-Lease – 100% of sub-leases go to the State (reducing the principal amount due.
Personal Liability – The owners of the Company benefitting from the award must sign a note to the City/County for the entire loan amount. This note is only in place until the Contract with the State is closed. This process is delineated next, and normally requires less than one year.
Contract with the State, CLOSURE;
- Spend the State's money (done at closing).
- Match the amount of the State's award with an equal amount of Company Equity.
This can be in other real estate, machinery and equipment or cash. This is verified at the time the application is submitted to the State.
- Create and/or retain the required number of jobs (51% must be for LMI persons).
- A representative of the TCF makes a site visit, documents are submitted, then the contract is administratively closed.
Transfer of Assets - Assets are restricted from being transferred out of the Company without written consent of the Department except during the normal course of business.
Maintenance of Ownership - The existing ownership structure shall not be changed without prior written approval from City/County and the State, during the contract period.
- A clean Phase I Environmental Site Assessment will be required for the property.
- A current survey of the property will be required for the project.
- A current appraisal of the property will be required for the project as well.
Draft copies of all documents are available.
Texas Enterprise Fund
Texas Enterprise Fund
The Texas Enterprise Fund is the largest "deal-closing" fund of its kind in the nation. The fund is used only as a final incentive tool where a single Texas site is competing with another viable out-of-state option. Additionally, the TEF will only be considered to help close a deal that already has significant local support behind it from a prospective Texas community.
Projects that are considered for the TEF must demonstrate a significant rate of return on the public dollars being invested in the project. Additionally there are several primary measures that every TEF project must meet in order to be considered for an award. Those include but are not limited to the following:
- Competition with another state for the project must exist and the business must not have already made a location decision
- Projected new job creation must be significant - typically creating more than 75 jobs in urban areas or more than 25 in rural areas
- The new positions must be high-paying jobs - above the average wage of the county where the project would be located
- Capital investment by the company must be significant
- The project must have community involvement from the city, county and/or school district, primarily in the form of local economic incentive offers
- The applicant must be financially sound
- The applicant's business sector must be an advanced industry that could potentially locate in another state or country
Awards have ranged from $200,000 to $50,000,000, based upon capital investment of $5,000,000 to $3,000,000,000 and job creation of 55 to 6,000 new employees. Awards are averaging 3.9% of funds invested by the Company.
Mineral Wells will fully support the application process for all projects that qualify.
Texas Enterprise Zone Program
Texas Enterprise Zone Program
The Texas Enterprise Zone Program is an economic development tool for local communities to partner with the State of Texas to promote job creation and capital investment in economically distressed areas of the state.
Texas Enterprise Zone Program Overview
Local communities must nominate a company as an Enterprise Project to be eligible to participate in the Enterprise Zone Program. Legislation limits allocations to the state and local communities per biennium. The state accepts applications quarterly with deadlines on the first working day of March, June, September and December.
Benefits to Participation
Designated projects are eligible to apply for state sales and use tax refunds on qualified expenditures. The level and amount of refund is related to the capital investment and jobs created at the qualified business site.
|Level of Capital Investment||Maximum Number of Jobs Allocated||Maximum Potential Refund||Maximum Refund Per Job Allocation|
|$40,000 to $399,999||10||$25,000||$2,500|
|$400,000 to $999,999||25||$62,000||$2,500|
|$1,000,000 to $4,999,999||125||$312,500||$2,500|
|$5,000,000 to $149,999,999||500||$1,250,000||$2,500|
|Double Jumbo Project $150,000,000 to $249,999,999||500||$2,500,000||$5,000|
|Triple Jumbo Project $250,000,000 or more||500||$3,750,000||$7,500|
- Communities may nominate projects, for a designation period up to five years, non-inclusive of a 90-day window prior to the application deadline. Employment and capital investment commitments must be incurred and met within this timeframe.
- Projects may be physically located in or outside of an Enterprise Zone.
- If located within a zone, the company commits that at least 25% of their new employees will meet economically disadvantaged or enterprise zone residence requirements.
- If located outside of a zone, the company commits that at least 35% of their new employees will meet economically disadvantaged or enterprise zone residency requirements.
- Under limited statutory provisions, an enterprise project designation may be granted for job retention
New Market Tax Credits
New Market Tax Credits
The US Department of Treasury introduced a new economic development tool a few years ago that can be very beneficial to acquisition/construction projects that cost something in excess of five million dollars. Although this tends to be a rather complicated program involving a host of accountants and attorneys over a seven year period, it can generate a "free" equity injection at the beginning of the project of as much as twenty percent of the anticipated project cost.
If the desired location of the facility (existing or to be constructed) is not in a Federally designated eligible area, the project can still be pursued utilizing a Targeted Population approach. This method however causes additional concerns for the NMTC Investor as well as the Community Development Entity.
As is usually the case, the larger the "free" money component, the higher the degree of difficulty in attaining the funds.
The graphic below delineates a sample NMTC structure. View/download a larger, PDF file of the graphic below.
Freeport Inventory Savings
Freeport Inventory Savings
In 1989 Texas voters approved a constitutional amendment giving local property tax jurisdictions the option to exercise or not exercise, their authority to tax specific personal property, otherwise known as freeport goods. The freeport exemption exempts certain types of tangible personal property for taxation, generally inventory, raw material, goods in process, or stored goods in transit.
To quality the property must meet the following criteria:
- Acquired in or imported into Texas to be forwarded out of state.
- Detained in Texas for assembling, storing, manufacturing, processing, or fabricating purposes by the person who acquired or imported it.
- Transported out of state within 175 days after the date the person acquired it, or imported it, into the State of Texas.
Oil, natural gas, and other petroleum products were excluded from eligibility of the exemption and remain taxable.
The application and qualification process is very simple and straightforward. The amount of freeport tax exemption for goods received each year is based on the percentage of qualified freeport goods sold in the previous calendar year. A one page application must be filed with the appraisal district of the county where the goods are located and requests that a company provide information to identify qualified freeport good sold in the previous calendar year. The application must be filed between January 1st and May 1 of each tax year. A late application may be accepted up until roll certification subject to a 10% penalty. Most appraisal districts require documentation be submitted to prove the goods do qualify for the exemption. Companies rely on internal sales reports, customer lists, financial statements etc to meet documentation requirements. The ability to track the goods from acquisition to disposition or shipment out of state is very important.
The City of Mineral Wells, Palo Pinto County, Palo Pinto General Hospital, Palo Pinto County Fire/EMS District and Palo Pinto County Water District all provide the Freeport Exemption. The Mineral Wells Independent School District is willing to consider it on a case by case basis.