HomeMy WebLinkAboutR-2010-15 nominate E. I. du Pont de Nemours and Company (DuPont) as a Texas Enterprise Zone project
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REQUEST FOR CITY COUNCIL AGENDA ITEM
Agenda Date Requested: 7/26/2010
Requested By: Stacey Osborne
Department: Administration
Report: Resolution: X Ordinance:
A{lpropriation
Source of Funds:
Account Number:
Exhibits: Texas Enterprise Zone Resolution
Exhibits: Ordinance # 2010-3248
Amount Budgeted:
Amount Requested:
Budgeted Item: YES NO
Exhibits: Texas Enterprise Zone Overview
SUMMARY & RECOMMENDATION
The Texas Enterprise Zone is an economic development program that allows local communities to partner with
the State of Texas to promote job creation/retention and capital investment in economically distressed areas of
the state. Companies that wish to apply for Texas Enterprise Zone project designation must have the
nomination of a local community in order to participate. Companies can participate by either creating or
retaining jobs, and they must commit to a minimum capital investment of $40,000 and creation or retention of a
minimum of 10 jobs.
The City of La Porte passed Ordinance Number 2010-3248 on May 10,2010 authorizing the City's
participation in the Texas Enterprise Zone program. At that time Council also nominated Invista as an
Enterprise Zone project. Tonight we are asking Council to pass a resolution nominating E. I. du Pont de
Nemours and Company ("DuPont") as a Texas Enterprise Zone project. The company is applying with a job
retention project, and they have committed to a capital investment of $70M and to the retention of 490 jobs
over the next five years.
We brought this project to Council as a workshop item on July 12,2010, introducing DuPont and asking for
Council's guidance on moving forward. Kenneth Martin, a Senior Consultant from DuPont, and George Francis, a
Director at Deloitte Tax LLP, answered questions and explained how the DuPont project qualifies as a Texas
Enterprise Zone project. After speaking with Mr. Martin and Mr. Francis, Council suggested that we bring the
resolution forward for a vote.
Representatives from DuPont and Deloitte are here this evening to answer any questions you may have, and we have
included an overview of the Texas Enterprise Zone program for your information.
Ron Bottoms, City Manager
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date .
RESOLUTION No. J.DJ D-I rJ
WHEREAS, the City of La Porte, Texas (City) has previously passed Ordinance No. 2010-3248 on May
10, 2010, electing to participate in the Texas Enterprise Zone Program, and the local incentives offered
under this resolution are the same on this date as were outlined in Ordinance No. 2010-3248;
WHEREAS, the Office of the Governor Economic Development and Tourism (EDC) through the
Economic Development Bank (Bank) will consider E. I. du Pont de Nemours and Company as an
enterprise project pursuant to a nomination and an application made by the City;
WHEREAS, the City desires to pursue the creation of the proper economic and social environment in
order to induce the investment of private resources in productive business enterprises located in the City
and to provide employment to residents of enterprise zones and to other economically disadvantaged
individuals;
WHEREAS, pursuant to Chapter 2303, Subchapter F of the Texas Enterprise Zone Act, Texas
Government Code (the "Act"), E. I. du Pont de Nemours and Company has applied to the City for
designation as an enterprise project;
WHEREAS, the City finds that E. I. du Pont de Nemours and Company meets the criteria for
designation as an enterprise project under Chapter 2303, Subchapter F of the Act on the following
grounds:
1. E. I. du Pont de Nemours and Company is a "qualified business" under Section 2303.402 of
the Act since it will be engaged in the active conduct of a trade or business at a qualified business
site within the governing body's jurisdiction located outside of an enterprise zone and at least
thirty-five percent (35.0%) of the business' new employees will be residents of an enterprise zone
or economically disadvantaged individuals; and
2. There has been and will continue to be a high level of cooperation between public, private, and
neighborhood entities within the area; and
3. The designation of E. I. du Pont de Nemours and Company as an enterprise project will
contribute significantly to the achievement of the plans of the City for development and
revitalization ofthe area.
WHEREAS, the City finds that E. I. du Pont de Nemours and Company meets the criteria for tax relief
and other incentives adopted by the City and nominates E. I. du Pont de Nemours and Company for
enterprise project status on the grounds that it will be located at the qualified business site, will create a
higher level of employment, economic activity and stability; and
WHEREAS, the City finds that it is in the best interest of the City to nominate E. I. du Pont de Nemours
and Company as an enterprise project pursuant to the Act;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LA PORTE,
TEXAS:
That the findings of the City and its actions approving this resolution taken at the council
meeting are hereby approved and adopted.
BE IT FURTHER RESOLVED that E. I. du Pont de Nemours and Company is a "qualified business",
as defined in Section 2303.402 ofthe Act, and meets the criteria for designation as an enterprise project,
as set forth in Section 2303, Subchapter F ofthe Act.
BE IT FURTHER RESOLVED that the enterprise project shall take effect on the date of designation of
the enterprise project by the agency and terminate on September 1,2015.
PASSED BY THE CITY COUNCIL of the City of La Porte, Texas this 26th day of July, 2010.
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Mayor 0 Tern
THE STATE OF TEXAS
COUNTY OF HARRIS
BEFORE ME, the undersigned authority, on this day personally appeared Daryl Leonard, Mayor
Pro Tern of the City of La Porte, Texas, known to me to be the person whose name is subscribed to the
foregoing instrument, and acknowledged to me that he executed the same for the purposes and
consideration therein expressed.
GIVE'N under my hand and seal of office thi~~ay of "JUt y , 20 I 0
Lp?tUd~O~~
Notary Public, State of Texas
My commission expires: f .JI "'/3
(Notary Seal)
MARTHA GILLETT
My CommiSSion Expires
August 31. 2013
ORDINANCE No.
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An Ordinance of the City Council of the City of La Porte, Texas, authorizing
the City's participation in the Texas Enterprise Zone Program pursuant to
the Texas Enterprise Zone Act, Chapter 2303, Texas Government Code;
providing tax incentives, designating a liaison for communication with
interested parties, and nominating INVIST A S.a r.l. to the Office of the
Governor Economic Development & Tourism (EDT) through the Economic
Development Bank (Bank) as an Enterprise Project (Project); containing an
severability clause; containing an Open Meetings clause; providing an
effective date hereof.
WHEREAS, the City Council of the City of La Porte, Texas (City) desires to create the
proper economic and social environment to induce the investment of private resources in
productive business enterprises located in severely distressed areas of the city and to
provide employment to residents of such area; and
WHEREAS, the project or activity is not located in an area designated as an enterprise
zone; and
WHEREAS, pursuant to the Texas Enterprise Zone Act (Act), Chapter 2303, Texas
Government Code, Subchapter F of the Act, INVISTA S.il r.I. has applied to the City for
designation as an enterprise project; and
WHEREAS, the City finds that INVIST AS.. r.1. meets the criteria for tax relief and other
incentives adopted by the City on the grounds that it will be located at the qualified
business site, will create a higher level of employment, economic activity and stability;
and
WHEREAS, a duly advertised public hearing to consider this ordinance was held by the
City Council on May 10,2010;
Now, THEREFORE BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LA PORTE,
TEXAS THAT:
Section 1:
The City nominates INVISTA S.il r.I. for enterprise project status.
Section 2:
The following local incentives, at the election of the City Council of the
City of La Porte, are or may be made available to the nominated project or
activity of the qualified business:
a) The City may abate taxes on the increase in value of real property
improvements and eligible personal property that locate in a
designated enterprise zone for up to 5 years, to the extent eligible for
tax abatement under state law and city ordinances. The level of
abatement shall be based upon capital investment, and the extent to
which the business receiving the abatement creates jobs for qualified
employees, in accordance with the City of La Porte Tax Abatement
Guidelines and Criteria, Chapter 66 of the La Porte Code of
Ordinances, and with "qualified employee" being defined by the Act.
b) The City may, as allowed by law, provide business and industrial
development services, including:
1) Grants to eligible companies through the city's Type B sales tax
corporation;
2) Chapter 380 tax rebates for projects which significantly enhance
the city's tax base;
3) Freeport exemption on property tax for employer's inventory that
is shipped outside of Texas;
4) has established a Tax Increment Reinvestment Zone;
5) provision of publicly owned land for development purposes,
including residential, commercial, or industrial development;
6) creation of special one-stop permitting and problem resolution
centers or ombudsmen; or
7) promotion and marketing services.
c) The City may, as allowed by law, provide regulatory relief to
businesses, including:
1) zoning changes or variances;
2) exemptions from unnecessary building code requirements,
impact fees, or inspection fees; or
3) streamlined permitting.
d) The City may, as allowed by law, provide enhanced municipal
services to businesses, including:
1) improved police and fire protection;
2) institution of community crime prevention programs; or
e) The City may, as allowed by law, provide improvements III
community facilities, including:
1) capital improvements in water and sewer facilities;
2) road repair; or
3) creation or improvement of parks.
f) The City may, as allowed by law, provide job training and
employment services to businesses, including:
1) retraining programs;
2) literacy and employment skills programs;
3) vocational education; or
4) customized job training.
Section 3:
Section 4:
Section 5:
Section 6:
Section 7:
Section 8.
The enterprise zone areas within the City are reinvestment zones In
accordance with the Texas Tax Code, Chapter 312, Section 312.203.
The City of La Porte City Council directs and designates Stacey Osborne
as the City's liaison to communicate and negotiate with the EDT through
the Bank and enterprise project(s) and to oversee zone activities and
communications with qualified businesses and other entities in an
enterprise zone or affected by an enterprise project.
The City finds that INVIST A S.a r.I. meets the criteria for designation as
an enterprise project under Chapter 2303, Subchapter F of the Texas
Enterprise Zone Act on the following grounds:
(a.) INVISTA S.a r.I. is a "qualified business" under Section 2303.402
of the Act since it will be engaged in the active conduct of a trade
or business at a qualified business site within the governing body's
jurisdiction, located outside of an enterprise zone and at least
thirty-five percent (35%) of the business' new employees will be
residents of an enterprise zone or economically disadvantaged
individuals; and
(b.) There has been and will continue to be a high level of cooperation
between public, private, and neighborhood entities in the area; and
(c.) The designation of INVISTA S.a r.I. as an enterprise project will
contribute significantly to the achievement of the plans of the City
for development and revitalization of the area.
The enterprise project shall take effect on the date of designation of the
enterprise project by EDT and terminate on June 1, 2015 (not less than
one year, or more thanfive (5) years after the date of designation).
Should any section or part of this ordinance be held unconstitutional,
illegal, or invalid, or the application to any person or circumstance for any
reasons thereof ineffective or inapplicable, such unconstitutionality,
illegality, invalidity, or ineffectiveness of such section or part shall in no
way affect, impair or invalidate the remaining portions thereof; but as to
such remaining portion or portions, the same shall be and remain in
full force and effect and to this end the provisions of this ordinance
are declared to be severable.
The City Council officially finds, determines, recites and declares that a
sufficient written notice of the date, hour, place and subject of this meeting
of the City Council is posted at a place convenient to the public at the City
Hall ofthe city for the time required by law preceding this meeting, as
required by Chapter 551, Tx. Gov't Code; and that this meeting has been
open to the public as required by law at all times during which this
ordinance and the subject matter thereof has been discussed, considered
and formally acted upon. The City Council further ratifies, approves and
confirms such written notice and the contents and posting thereof.
Section 9.
This Ordinance shall be effective after its passage and approval.
PASSED AND APPROVED this the I fIG day of ~
CITY OF LA PORTE
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Mayor I
,2010.
ATTEST:
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City Secretary
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Assistant City Attorney
The Enterprise Zone Program (EZP) was created to help companies grow and expand their business
in Texas. It is an economic development sales tax incentive partnering the state and local
government to help local employment and support business investment. As a company grows, they
are eligible to apply for a state sales tax refund. During these tough economic times, EZP has
supported more jobs than any other state incentive program.
Performance-Based Incentive
The EZP is performance-based and allows qualified businesses to receive a refund of state sales and
use taxes, ranging from $2,500-$7,500 per job created and/or retained during a five year designation
period, up to a maximum of $1.25-$3.75 million. The level and amount of refund is related to the
capital investment and jobs at the qualified business site.
Two Strong Economic Development Incentives
While the Texas Enterprise Fund (TEF) is an economic development tool used to assist in the State's
recruitment endeavors, the EZP can also assist with job retention efforts.
Jobs
Capital Investment
Funded Projects
Texas Enterprise Zone
100,264 (new & retained)
$15.8 Billion
198
Texas Enterprise Fund
56,002 (new)
$14.1 Billion
55
Sept. 1,2003 - Aug.31,2009
Program Requirements
Communities may nominate projects, for a designation period up to five years, non-inclusive of a
gO-day window prior to the application deadline. Employment and capital investment
commitments must be incurred and met within this timeframe.
Projects may be physically located in or outside of an enterprise zone. In a zone, a company commits
that 25% of their new employees will meet economically disadvantaged or enterprise zone
residency requisites. Outside a zone, a company commits that 35% of their new employees will meet
economically disadvantaged or enterprise zone residency requisites. Under statutory provisions, an
enterprise project designation may be granted for job retention.
Jobs must accumulate at least 1,820 hours during a 12-month period. Jobs must exist through the
end of the designated period, or at least three years after the date on which a state benefit is
received, whichever is later. Communities with a population of less than 250,000 may nominate up
to six projects per state biennium while those with a population of 250,000 or more may nominate
up to nine projects per state biennium.
Enterprise Zone Projects Approved
State Biennium FY2008-2009
Projects Approved
Designations Used
Projected Capital Investment
Projected New Jobs
Projected Retained Jobs
89
114
$5,772,038,667
13,068
38,693
1 - East Texas ($415.9M)
Cass County - International Paper Company, $1 SOM
Center- Tyson Farms,lnc.,$SM
Corrigan - Georgia-Pacific Wood Products, $46.8M
Harrison County - General Cable Industries, $SAM
Huntsville - Weatherford US, LP, $1 S.3M
Jacksonville - eTelecare Global Solutions, $1.9M
Limestone County - NRG Texas Power, $150.8M
Mount Pleasant - Sweet Shop Candies, $4AM
Polk County - Georgia-Pacific Wood Products, $65.5M
Tyler - Delek Refining, $30.8M
2 - Gulf Coast ($1.5B)
Baytown - NRG Texas Power, $13.7M
Bryan - Kent Moore Cabinets, $6M
Bryan - Sanderson Farms, SSM
College Station - Lynntech,lnc., $12M
Houston - Anheuser-Busch, $65M
Houston - Deloitte LLP, $61.4M
Houston - Grocers Supply Co., $1 SOM
Houston - Valero Refining-Texas, $21 S.SM
Liberty County - Georgia-Pacific Wood Products, $31 M
Matagorda County - NRG South Texas, $2S5M
Orange - INVISTA S.a r.l., $1 SOM
Pearland - Neela,lnc., $6M
Port Arthur - The Medical Center of SE Texas, SSM
Port Arthur - Total Petrochemicals USA,lnc., $268M
Rosenberg - Frito-Lay, Inc., $ 7.4M
Schulenburg - Dairy Farmers of America, $38M
Thompsons - NRG Texas Power, $201.2M
Waller County - RTG Furniture ofTexas, L.P., $SOM
3 - South Texas ($2B)
Bexar County - Tesoro Companies, Inc., $251 M
Boerne - Albany Engineered Composites, $34.6M
Calhoun County - Formosa Plastics Corporation, $600.7M
Cibolo - Kalmar RT Center, $1 O.9M
Comal County - TXI Operations, $260M
Corpus Christi - Berry Contracting, SSM
Corpus Christi - Flint Hills Resources, LP, $2S0M
Corpus Christi - Overhead Door, SSM
Corpus Christi - Stripes LLC, $5M
San Antonio - AGE Refining, $12.6M
San Antonio - Fred Loya Insurance Agency, $1 O.8M
San Antonio - Tindall Corporation, $2SM
San Antonio - Valero Services,lnc., $6.SM
Seguin - Caterpillar,lnc., $176.8M
Victoria - StarTek USA, Inc., $1 O.6M
Windcrest - Rackspace US,lnc., $436AM
4 - North Texas ($1.1 B)
Dallas - Niagara Bottling LLp, $56.4M
Dallas - Ryan,lnc., $5.5M
Dallas - Solo Cup, $3.9M
Fort Worth - DCFS USA, $17.5M
Fort Worth - EFW, $31.8M
Fort Worth - MillerCoors LLC, $1 04.7M
Gainesville - Allied Production Solutions, LP, $16.SM
Garland - Atlas Copco Drilling Solutions, $8.9M
Garland - Ecolab, $13M
Garland - MAPEl Corporation, $21.2M
Garland - The Sherwin-Williams Company, $7.7M
Irving - Frito-Lay,lnc., $S.7M
Little Elm - Retractable Technologies, $7.9M
Meridian - Double B Foods, $4.2M
North Richland Hills - Tyson Prepared Foods, $9.6M
Olney - AirTractor, SSM
Piano - Connecticut General Life Ins. Co., $38M
Richardson - Health Care Service, $26SM
Sunnyvale - Millard Refrigerated Services,lnc., $49M
Tarrant County - Bell HelicopterTextron, Inc., $266.7M
Vemon - Tyson Refrigerated Processed Meats, SSM
Waco - Associated Hygienic Products, $37.1 M
Waco - Caterpillar Logistics Services, $69.7M
Waco - L-3 Communications Integrated Systems, $15M
Waco - The Sherwin-Williams Company, SSM
Waxahachie - Owens Corning Insulating Sys., $23.2M
Waxahachie - Walgreen Co., $38M
5 - Valley ($95.9M)
Brownsville - T-Mobile USA, $17.SM
Edinburg - Doctors Hospital, $S9.4M
Harlingen - United HealthCare Svs., $6.3M
McAllen - Fred Loya Insurance Agency, $5.2M
McAllen - Infinity Insurance, $ 7.5M
6 - West Texas ($91.4M)
Brownwood - 3M Company, $7.6M
Brownwood - Kohler, $7.6M
Lubbock - Shearer's Foods Lubbock, $6.9M
Lubbock - WesTx Packaging Company, $6.1 M
Odessa - Odessa Regional Hospital, $SM
Potter County- Tyson Fresh Meats,lnc., $11 M
San Angelo - Glazer's Wholesale, $7.2M
San Angelo - Martifer-Hirschfeld Energy Systems, $40M
1 - Central Texas ($303.3M)
Austin - Otis Spunkmeyer, Inc., $17.8M
Austin - Spansion LLC, $280M
Travis County - Golfsmith International, $S.SM
8 - Upper Rio Grande ($31.2M)
EI Paso - ADp,lnc., $21 M
EI Paso - TheToro Company,$10.2M
People interested in the EZP should contact their city or county public officials. For more information,
visit the Governor's website at http://governor.state.tx.us/ecodevlfinancial_resources/tax_incentives/.
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Office of the Governor. Economic Development & Tourism Division
P.O. Box 12428 . Austin,Texas . 78711-2428