File #: 15-263    Name: Landon Homes and Pulte Homes Chapter 380
Type: Agenda Item Status: Approved
In control: City Council Regular Meeting
On agenda: 3/17/2015 Final action: 3/17/2015
Title: Consider/Discuss/Act on Revised Chapter 380 Economic Development Agreements between the City of McKinney and Landon Homes, LP, and between the City of McKinney and Pulte Homes of Texas, LP.
Attachments: 1. Council Minutes 091614, 2. 380 Agreement with Pulte Homes, 3. 380 Agreement with Landon Homes, 4. Landon Agreement Applicant Version, 5. Pulte Agreement Applicant Version, 6. Landon Agenda Item 091614, 7. Pulte Agenda Item 091614, 8. Local Sales and Use Tax Bulletin, 9. Applicant's Sales vs. Use Tax Diagram, 10. Applicant's overview Texas Use Tax
Title
Consider/Discuss/Act on Revised Chapter 380 Economic Development Agreements between the City of McKinney and Landon Homes, LP, and between the City of McKinney and Pulte Homes of Texas, LP.

Summary

MEETING DATE: March 17, 2015

DEPARTMENT: City Manager

CONTACT: Barry Shelton, Assistant City Manager


RECOMMENDED CITY COUNCIL ACTION: Approval of the agreements.

ITEM SUMMARY:
* Landon Homes and Pulte Homes have requested approval of revised Chapter 380 Economic Development Agreements to modify the language relating to purchases from suppliers or vendors having outlets within McKinney.

BACKGROUND INFORMATION:
* Staff was contacted by Doug Duffie, CPA, who proposed a Chapter 380 Agreement for sharing the use taxes generated by his clients (Landon Homes, LP and Pulte Homes of Texas, LP).
* On September 16, 2014, the City Council approved Chapter 380 Economic Development Agreements with the two homebuilders to source the local use taxes on materials incorporated into homes in McKinney (based on tax rates at the job site) in exchange for sharing a portion of the new incremental local use taxes generated.
* The motion for approval on the two items included a condition that the agreement would not apply if the purchase of materials or other products was from McKinney merchants.
* Following approval of the agreements, the City Attorney drafted language accomplishing the wishes of the Council as stated in the motion for approval.
* The applicant, Mr. Doug Duffie, disagreed with the language as proposed and has requested City Council clarification. In question are sections 4.01 and 5.06.

* The City's version of the agreements reads as follows:
* "4.01 To the extent Company purchases taxable items from suppliers or vendors having a sales tax outlet situated within the City's corporate limits the Company shall pay sales and use taxes to such suppliers or vendors at the point of sale situated within the City's corporate limits ...

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