A review of Fort Worth’s economic incentives for 2021 shows the city received $58.9 million in revenue from various projects, but that goals for minority and women-owned business participation in the incentives are not yet being met.
According to the review, the $58.9 million in revenue generated by the 43 agreements is about 7% of the city’s total revenues.
The revenue “would not have been available otherwise,” Robert Sturns, director of economic development, said.
The city’s economic development department reviewed nine tax abatement and 34 economic development programs in 2021 for the report.
“Our incentives are performance-based and structured to ensure that recipients of either a tax abatement or a Chapter 380 grant are providing well-paying jobs to our residents and meeting specific benchmarks,” said Sturns.
The report took a closer look at three incentive agreements: Ariat International, Ben E. Keith and the Kimpton Hotel.
Ariat International, which received incentives for the footwear, apparel and accessories brand to open a 1-million square foot regional distribution center at AllianceTexas, had a minimum project private investment of $73 million, according to the report.
The actual capital investment was $139.2 million. Ariat earned 15% out of the available 25% construction incentive on property taxes. Ariat did not receive the maximum construction incentive because it did not meet the minimum of hiring minority and women-owned business enterprise (M/WBE) companies to build the center.
Food and beverage distributor Ben E. Keith’s minimum private investment was $22 million and its verified private investment was $22.7 million for an expansion of a warehouse in south Fort Worth. The company earned 20.10% out of the available 35% construction incentive for the first two years of the abatement term and 5.05% out of the available 17.50% construction incentive for year three to seven of the abatement term.
Ben E. Keith did not meet the expected participation of Fort Worth businesses or certified minority and women-owned companies, which resulted in a reduction of their construction incentive by 14.90% in the first two years of the term and 11.95% in years three to seven of the abatement term.
The downtown Fort Worth Kimpton Hotel’s minimum project private investment was $56 million toward the construction of a downtown hotel. Its actual capital investment was $56.1 million, according to the report.
Kimpton earned all of the available 43% construction incentive on hotel occupancy taxes. Kimpton achieved the maximum construction incentive due to meeting the goal to contract with minority and women-owned businesses.
Overall, the report says that $16.5 million was committed in 2021 toward minority and women-owned companies in economic incentive agreements, but only $12.4 million was verified. In 2020, $39 million was committed, but about $36.3 million was verified.
“While the M/WBE commitments were not met fully in tax year 2021, we continue to see the gap tightening in the last few years as we have aligned our policy with city ordinance,” according to the report.
For tax year 2021’s construction spending, Fort Worth businesses received $36.7 million in construction spending through economic incentive contracts, which more than tripled the $11.4 million committed, according to the report.
The report was submitted to the Fort Worth City Council on Oct. 4.
Bob Francis is business editor for the Fort Worth Report. Contact him at bob.francis@fortworthreport.org. At the Fort Worth Report, news decisions are made independently of our board members and financial supporters. Read more about our editorial independence policy here.
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