What is a 380 agreement? The KDT article about the Gulf Coast retail development potential mentions a 380 agreement in passing, as if all of the readership should already know what a 380 agreement is all about. I am someone who follows politics and local government pretty closely, but I was unfamiliar with that term. So here’s some more information…
A 380 agreement refers to Chapter 380 of the Texas Local Government Code. The chapter sets out rules and provisions for using public money for loans and grants to promote state or local economic development.
A 380 agreement was discussed in April 2014 when the Gulf Coast Gateway Retail Center came up in a city council meeting. Councilmember Carson Conklin described how such an agreement would work in practice:
Mr. Conklin described a 380 agreement as a contract that would mutually benefit a developer and the city by using tax deferrals to reimburse the developer for items e.g. capital infrastructure. As a development generated ad valorem or other tax revenues, e.g., sales tax and hotel occupancy tax (HOT) if the project has a hotel, a portion of the taxes was returned to the developer to help fund the project. A 380 did not take tax dollars from city coffers, it was a self-funding tax that used revenue created by a development to pay for a project; a developer was reimbursed only after the full development was completed and constructed. The risk was to the developer if the project did not generate revenues as projected. A 380 instrument is the developer generating money that is returned to him by something he created, and the city, county, EIC, and HOT realize the full taxable value of the project when it is paid back; in the meantime, entities realize all of the direct and indirect impact from the construction of the development and the benefit of retail sales.
Read the rest of the minutes from that meeting here: http://www.kerrvilletx.gov/ArchiveCenter/ViewFile/Item/1491
At the end of that discussion in April 2014, no action was taken and the matter was tabled. Members of council at that time included:
- Mayor Jack Pratt
- Carson Conklin
- Gene Allen
- Stacie Keeble
- Justin MacDonald
We can find only one other historical example of 380 agreements on Kerrville projects, and that is with Mooney International to replace the roof.