HOUSTON, TX - Companies that build environmentally friendly facilities in Harris County could get a sizable property tax break under a proposal to be considered by Commissioners Court today. The plan would offer up to a 100 percent tax abatement for 10 years on whatever amount a builder spends to become certified under the U.S. Green Building Council's Leadership in Energy and Environmental Design, or LEED, program.
It's one of two significant changes included in the latest version of the county's tax abatement guidelines, which the court must adopt every two years. The plan also calls for an abatement of up to 80 percent for companies that build facilities in certain low-income areas and hire people who live there. Commissioner Sylvia Garcia said the county really wants to encourage "green" building. "Providing the incentive will go a long way to get more people on board with doing more that's environmentally friendly and more efficient for everyone," Garcia said Monday.
The environmental tax abatement would apply only to new commercial construction that meets the national green building council's certification standards. It is meant to compensate companies for the added cost of meeting those standards. The council awards a series of points based on issues such as how the building site works with its surrounding environment, the use of recycled materials, its energy efficiency and the environmental quality of the interior workspace. It then assigns ratings ranging from "certified" to "platinum."
Companies that construct buildings meeting the lowest rating would be eligible for a tax abatement on 1 percent of the construction costs. Buildings with higher ratings would get bigger discounts, with the top receiving credit for 10 percent of construction costs. For example, a $10 million new building that was built to platinum standards would be eligible for a $1 million tax abatement, he said. At the county's current property tax rate, that could save $6,300 per year. "If a company spent an extra million dollars to make a building green, then we feel that they should not have to pay taxes on that million dollars," said David Turkel, director of the Harris County Community Services Department.
Unlike most other tax abatements, the applicant would not have to create new jobs or be new to Harris County. Turkel said the county wanted to encourage as much "green" building as possible. Mike Wyatt, a Houston commercial and industrial developer, said he believes the incentive will have a significant effect on builders' and investors' choices as they embark on construction projects.
The city of Houston recently adopted a commercial energy code that requires builders to meet certain environmental standards. Although that code stops short of requiring LEED certification, the tax abatement may persuade some developers to take that extra step, said Wyatt, managing director of Core Real Estate. The incentive also may encourage builders to strive for an even higher rating, he said. "I think it's exactly the kind of thing you'll get great support in the development community with," Wyatt said.
The other new abatements are designed to encourage companies to invest in low-income areas identified by the U.S. Department of Housing and Urban Development. In addition to a standard 50 percent abatement, the company could receive up to 10 percent more for building in a low-income area, and up to 20 percent on top of that for employing people who live in the area or another one designated by HUD as low income.
The abatement would start at 2 percent for companies employing 10 to 24 people from the targeted areas and grow to 20 percent for companies employing 100 or more. Garcia said she hopes the incentive will attract employers that will hire people with two-yea
Source: Houston Chronicle