4.507 Designation as highly significant endangered ("HSE")

  1. A site or structure may be designated as highly significant endangered if it satisfies the following qualifications:
    1. It meets five or more of the criteria set out in Section 4.502D; and
    2. It is determined by the city council to be threatened by deterioration, damage or irretrievable, irreplaceable loss due to neglect, disuse, disrepair, instability, lack of financial resources and/or impending demolition. The nomination for designation shall describe how the structure meets the pertinent criteria in Paragraph D of this section, the existing and proposed use of the structure, any planned stabilization and/or rehabilitation by the property owner, and the nature and degree of endangerment to the structure. A structure designated highly significant endangered shall be deemed to be a historically significant site in need of tax relief to encourage its preservation, in accordance with section 11.24 of the Texas Tax Code.
  2. Eligibility for tax incentives.
    1. In order for property designated highly significant endangered to be eligible for tax incentives, all work shall be performed in accordance with the provisions of this chapter and applicable city codes and ordinances.  The Historic and Cultural Landmarks Commission and the city council shall review and approve applications for the tax incentive at the commencement of the project and upon satisfactory completion of the project.
    2. Property designated as highly significant endangered shall be eligible for rehabilitation incentives once every 20 years.
  3. Exemption for Stabilization of Highly Significant Endangered Structure.
    1. Description of Incentives. A structure designated Highly Significant Endangered, which is stabilized in accordance with this Section, and the land necessary for access to and use of the structure, shall be entitled to the following tax benefits (“Stabilization Incentives”) for a period of years as hereinafter set forth:
      1. The owner of the structure shall be entitled to exemption from City ad valorem taxes of all of the assessed value of the structure, commencing in the tax year immediately following the year in which the work is completed.  The exemption under this paragraph terminates when an owner qualifies for Rehabilitation Incentives under Paragraph D. below, or after 10 years, whichever occurs later.  In the event that the owner substantially rehabilitates the structure, but does not seek approval of the Rehabilitation Incentives under Paragraph C., the exemption under this paragraph shall terminate on the same date that the Rehabilitation Incentives would have terminated if the owner had followed the procedures set out in Paragraph D. below.  Nothing in this Article relieves the owner from the responsibility to submit an application for the exemption each year to the appraisal district for the county in which the property is located pursuant to the terms of the Texas Tax Code. The Historic Preservation Officer shall assist the owner in filing for such exemption, at the request of the owner.
      2. The owner of the structure shall be entitled to recover a part or all of the cost of such work through a partial exemption from City ad valorem taxes of up to 50 percent of the value of the land necessary for access to and use of the structure for a period not to exceed five years. The exemption shall commence in the tax year immediately following the year in which the work is completed.  In the event that the tax savings arising from the partial exemption for such one-year period is less than the cost of such work, the partial exemption may be carried over from year to year, for a total period not to exceed five years.  The owner will not be eligible for a partial exemption for stabilization subsequent to rehabilitation of the property and receipt of the Rehabilitation Incentives under Paragraph D. Nothing in this Article relieves the owner from the responsibility to submit an application for the exemption each year to the appraisal district for the county in which the property is located pursuant to the terms of the Texas Tax Code. The Historic Preservation Officer shall assist the owner in filing for such exemption, at the request of the owner.
    2. Stabilization. “Stabilization” of a structure designated as Highly Significant Endangered shall consist of exterior and interior improvements required to prevent further deterioration of the structure, as determined by the Building Official, but at a minimum shall include the following:
      1. The foundation shall be stable, have any defects that might affect the continued safety and life of the building corrected, and be made as level as reasonably possible;
      2. The roof shall be made water tight, replacing any defective material including wet or damaged insulation, shingles or wood elements;
      3. Correction of any defective enclosures, e.g. windows, doors and vents, that might allow for the entry of water, birds, rodents or vectors (bugs or animal capable of carrying a disease producing organism);
      4. Taking corrective action for the elimination of any infestation, e.g. termites, roaches, water bugs, mosquitoes, ticks, rodents, etc.; and
      5. Correcting any item that might be considered as a hazard to fire fighting efforts.  For this item, the Building Official may consult with the Fire Chief or his designee.
    3. Eligible Costs.  Eligible projects shall consist of work performed for the stabilization of the structure and may include exterior improvements and interior improvements to the frame, walls, floor, ceiling, plumbing, electrical wiring and mechanical items, such as heating and air conditioning systems.  Fixtures and decorative items shall not be eligible for consideration. Materials and labor for repairing, replacing or adding any of the following shall be eligible:
      1. Structural walls;
      2. Structural sub floors;
      3. Structural ceilings;
      4. Exterior doors;
      5. Exterior paint;
      6. Mechanical equipment;
      7. Windows;
      8. Exterior brick veneers or treatments;
      9. Plumbing;
      10. Electrical wiring;
      11. Roof and gutter where necessary for structural integrity;
      12. Facade items;
      13. Elevators;
      14. Foundations;
      15. Termite damage and treatment;
      16. Security and/or fire protection systems;
      17. Architectural and engineering services if directly related to the eligible costs described above; and
      18. Demolition and cleanup if directly related to the eligible costs described above.
    4. Ineligible Costs.  Ineligible costs include, but are not limited to, the following:
      1. Plumbing and electrical fixtures; provided, however, documented replacement of historic fixtures may be considered eligible;
      2. Overhead;
      3. Taxes;
      4. Supervisor payroll;
      5. Repairs of construction equipment;
      6. Tools; and
      7. Any other items not directly related to the exterior appearance or the structural integrity or viability of the building.
  4. Tax incentives for rehabilitation of highly significant endangered structure.
    1. Description of incentives. A structure designated highly significant endangered, which is substantially rehabilitated in accordance with this section, and the land necessary for access to and use of the structure, shall be entitled to the following tax benefits ("Rehabilitation Incentives") for a period of years as hereinafter set forth:
      1. Exemption from city ad valorem taxes of all of the assessed value of the structure;
      2. Exemption from city ad valorem taxes of any increase in the assessed value of the land necessary for access to and use of the structure, in excess of the assessed value for the tax year immediately prior to commencement of the rehabilitation. The assessed value of the land necessary for access to and use of the structure for city ad valorem tax valuation purposes shall be equal to the assessed value of such land for the tax year immediately prior to commencement of the rehabilitation; provided, however, in the event that such land is subsequently assessed at a lower value than the assessed value for the tax year immediately prior to commencement of the rehabilitation, the lower value will apply.
    2. Substantial rehabilitation. "Substantial rehabilitation" of a structure designated as highly significant endangered shall consist of rehabilitation at a cost which equals or exceeds the greater of 30 percent of the assessed value of the structure prior to rehabilitation, or three thousand dollars ($3,000.00).
    3. Term of rehabilitation incentives. The term of the rehabilitation incentives shall be a minimum of ten years commencing on the first day of the tax year following verification by the city council of completion of the rehabilitation pursuant to this chapter. In order to encourage early rehabilitation, the term of the rehabilitation incentives may be increased for up to an additional five years. If the rehabilitation is completed and the project passes all final inspections within two years after designation as highly significant endangered, the rehabilitation incentives shall be for a period of 15 years commencing on the first day of the tax year following verification by the city council of completion of the rehabilitation pursuant to chapter. The term of the rehabilitation incentives shall decrease by one year for every year that completion of rehabilitation is delayed, to a minimum term of ten years. Upon expiration of the term of the rehabilitation incentives, the structure and the land necessary for access to and use of the structure shall be taxed at the assessed value.
    4. Application for incentives. An application for incentives shall be filed with the historic preservation officer in accordance with Section 4.508E.
    5. Execution of commitment to repay. Upon satisfactory completion of the rehabilitation project, the owner shall record with the deed a document provided by the historic preservation officer as a notice of the historic site tax exemption and commitment to repay taxes in the event of default. The purpose of this document shall be to provide information on the terms of the tax incentive and penalties for negligently or willfully destroying a property during the period of exemption. The commitment shall be filed in the official property records of the county where the property is located, shall run with the land and shall bind the owner and any heirs and assigns. Any unpaid amount shall constitute a lien against the property. Failure to record such a document may result in the delay of receipt of incentives.
    6. Submittal of application to appraisal district. Nothing in this article relieves the owner from the responsibility to submit an application for the exemption each year to the appraisal district for the county in which the property is located pursuant to the terms of the Texas Tax Code. The historic preservation officer shall assist the owner in filing for such exemption, at the request of the owner.
  5. Removal of highly significant endangered designation.
    1. The highly significant endangered designation may be removed for the following reasons:
      1. It is determined that the site or structure is no longer historically, culturally, architecturally or archaeologically significant under the criteria listed in section 4.502E;
      2. It is determined that the site or structure is no longer endangered; or
      3. It is determined that such designation creates an unreasonable economic hardship upon the owner or owners in accordance with the provisions of section 4.506.
    2. An applicant seeking removal of the highly significant endangered designation on the basis that the site or structure is no longer endangered shall simultaneously nominate such structure for designation as historic and cultural landmark. The application for removal of the highly significant endangered designation and the request for designation of such property as historic and cultural landmark shall be considered and decided concurrently; provided, however, failure to designate such property as historic and cultural landmark by the city council shall not be grounds for denial of the application for removal of the highly significant endangered designation.
    3. Within ten days after approval by the city council of removal of the designation, the historic preservation officer shall remove the highly significant endangered designation from the official zoning maps of the city and shall file a notice that the highly significant endangered designation has been removed in the official property records of the county in which the property is located. In addition, if applicable, the historic preservation officer shall record the historic and cultural landmark designation on the city's official zoning maps and record such designation in the property records of the county in which such property is located.