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REQUEST FOR LA PORTE DEVELOPMENT CORPORATION AGENDA REQUEST FOR LA PORTE DEVELOPMENT CORPORATION AGENDA
<br />ITEMITEM
<br />June 27, 2016June 27, 2016AppropriationAppropriation
<br />Agenda Date Requested:Agenda Date Requested:
<br />N/AN/A
<br />Traci LeachTraci LeachSource of Funds:Source of Funds:
<br />Requested By:Requested By:
<br />Account Number:Account Number:
<br />Economic Development/TourismEconomic Development/Tourism
<br />Department:
<br />Amount Budgeted:Amount Budgeted:
<br />Report:Resolution:Resolution:Ordinance:Ordinance:
<br />Amount Requested:Amount Requested:
<br />Exhibits:
<br />Budgeted Item:Budgeted Item:YESYESNONO
<br />1. Notice of published Public Hearing Notice of published Public Hearing
<br />2. Development Agreement Development Agreement
<br />3. Project Scorecard Project Scorecard
<br />SUMMARY & RECOMMENDATIONSSUMMARY & RECOMMENDATIONS
<br />On April 25, 2016, the Board authorized staff to publish a public hearing notice for an economic development On April 25, 2016, the Board authorized staff to publish a public hearing
<br /> notice for an economic development
<br />incentive in an amount not to exceed $300,000 for Northern Safety Company, Inc. Since that time, staff has been incentive in an amount not to exceed $300,000 for Northern Safety Company,
<br /> Inc. Since that time, staff has been
<br />communicating with Northern Safetycommunicating with Northern Safetys representatives to finalize the scope of the project and draft a development s representatives to finalize the
<br /> scope of the project and draft a development
<br />agreement.
<br />Initial estimates indicated that this project would generate sales tax revenues and taxable business Initial estimates indicated that this project would generate sales tax revenues and
<br /> taxable business
<br />personal/inventory property in amounts that would yield a 2.2 year payback on a $300,000 LPDC incentive. As personal/inventory property in amounts that would yield a 2.2 year payback
<br /> on a $300,000 LPDC incentive. As
<br />discussions progressed, estimates regarding revenue were revised by the company. Based on the revised project discussions progressed, estimates regarding revenue were revised by the
<br /> company. Based on the revised project
<br />estimates, staff is recommending, and the Company has agreed to, a modified LPDC incentive of $230,000. The estimates, staff is recommending, and the Company has agreed to, a modified
<br /> LPDC incentive of $230,000. The
<br />project includes an economic development incentive in an amount not to exceed $230,000 within a fiveproject includes an economic development incentive in an amount not to exceed $230,000
<br /> within a five--year period year period
<br />and allocated according to the following terms:and allocated according to the following terms:
<br />Payments of $50,000 (Payment #1 of 5), $50,000 (#2 of 5), $40,000 (#3 of 5), $40,000 (#4 of 5), and Payments of $50,000 (Payment #1 of 5), $50,000 (#2 of 5), $40,000 (#3 of 5), $40,000
<br /> (#4 of 5), and
<br />$50,000 (#5 of 5); and$50,000 (#5 of 5); and
<br />120 full employment, rather than 140, phased in over time; and120 full employment, rather than 140, phased in over time; and
<br />Added business personal property and inventory taxable value of $1.25 million, as opposed to $2.5 million; Added business personal property and inventory taxable value of $1.25 million,
<br /> as opposed to $2.5 million;
<br />and
<br />New, annual taxable retail sales of $1.5 million for payment #3 and $2.5 million for payments #4 and 5; andNew, annual taxable retail sales of $1.5 million for payment #3 and $2.5 million
<br /> for payments #4 and 5; and
<br />Minimum five (5) year lease, andMinimum five (5) year lease, and
<br />The City will support the companyThe City will support the companys application to the Texas Enterprise Zone Program, Texas Skills s application to the Texas Enterprise Zone Program,
<br /> Texas Skills
<br />Development Fund, and any other StateDevelopment Fund, and any other State--sponsored incentive programs. sponsored incentive programs.
<br />Each payment identified above is contingent upon Northern Safety meeting specific performance benchmarks and Each payment identified above is contingent upon Northern Safety meeting
<br /> specific performance benchmarks and
<br />providing evidence of such performance to the Board. With the revised project estimates, the payback period is providing evidence of such performance to the Board. With the revised project
<br /> estimates, the payback period is
<br />4.65 years.
<br />Staff recommends approval of the development agreement with Northern Safety Company, Inc for an economic Staff recommends approval of the development agreement with Northern Safety Company,
<br /> Inc for an economic
<br />development incentive in an amount not to exceed $230,000.development incentive in an amount not to exceed $230,000.
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