AGENDA REPORT
DATE: October 28, 2024
TO: Community Redevelopment Agency of the City of Plant City
FROM: Bill McDaniel, Executive Director
SUBJECT: Brownfield Voluntary Cleanup Tax Credits
Certificate Sale
EXECUTIVE SUMMARY:
Section 376.30781, Florida Statutes, provides for tax credits in the amount of 50 percent of the costs of voluntary cleanup activity for rehabilitation of Brownfield sites in designated brownfield areas. The City submits eligible annual costs to the Florida Department of Environmental Protection (FDEP). FDEP issues a Voluntary Cleanup Tax Credit (VCTC) certificate which expires five years from the date of issuance and can only be used to offset Florida corporate income tax.
Local governments without Florida corporate income tax liability can sell or transfer their VCTC certificates to an entity that has Florida corporate income tax liability. As the CRA does not pay corporate income tax, the tax credits have no value to the City unless transferred to another entity within the five-year period. The transferee can be any entity that the CRA chooses, but they must have the requisite income tax liability because the tax credits cannot be transferred a second time. FDEP will issue the transferee a new certificate with the date of transfer and they will have up to an additional five years from that date to use the certificate.
VCTC certificates are issued by FDEP in July of each year. The City advertised our certificates for bid at this time as the earliest certificates were issued on July 16, 2020 and are due to expire July 2025.
Invitation for Bid 24-036CS-DM-IFB was published on September 3, 2024 and two bids were received at the submission deadline by Clocktower Tax Credits and Fallbrook Tax Credits. Staff determined Clocktower Tax Credits to be the highest priced bidder that was responsive and responsible to the IFB requirements for the following VCTC certificates for the listed project sites in Midtown. The total amount of VCTC certificates is $159,506.80. Clocktower has agreed to pay $.802 per dollar of tax credit for a total amount of $127,924.45.
RECOMMENDATION:
That the Community Redevelopment Agency Board adopt a resolution accepting the bid of Clocktower Tax Credits, LLC to broker the sale of Voluntary Cleanup Tax Credits in the amount of $127,924.45, and authorizing the Executive Director and City Attorney to execute the Agreement with Clocktower Tax Credits, LLC, and any necessary documents to effectuate the sale.
FISCAL IMPACT:
The revenue from this sale will be posted to the CRA Fund, Org #37030000 Obj #369910 - Sale of Tax Credits - CRA. The credits were earned based on the cleanup costs paid by the CRA.
Prepared by: Denise McDaniel, Community Services Manager