HomeMy WebLinkAboutResolution - 2018-R0356 - Expenditure Of LEDA To Be Provided To Superior Pipe Products, LLC - 09/27/2018Resolution No. 201H-RO356
Item No. 6.35
September 27, 2018
RESOLUTION
WHEREAS, pursuant to Section 501.073 of the Texas Local Government Code the City of
Lubbock, as the corporation's authorizing, unit, has the authority to approve all programs and
expenditures of the Lubbock Economic Development Alliance (LEDA); and
WHEREAS, the City Council finds that it is in the best interest of the public to approve the
program or expenditure, as proposed to the City Council by LEDA, as set forth in Exhibit "A"
attached hereto and incorporated herein by reference: NOW THEREFORE.:
13E IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK:
THAT' the prograin or expenditure of the Lubbock Economic Development Alliance, in the
amount Set forth in Exhibit "A" attached hereto and incorporated herein by reference, to be
provided to Superior Pipe Products, LLC, is hereby approved pursuant to Section 501.073 of
the 'Texas Local Government Code.
Passed by the City Council on September 27, 2019
DANIEL M. POP , MAYOR
ATTEST:
Ali
Reb t
a Garza, City Secretak._)
APPROVED AS TO CONTENT:
in Pru)ft, Burliness Development Director
AS TO FORM:
I �/;h Alh�
elli Leisure, Assistant City Attorney
a;e ms/RLS. LEDA E3xpenditurc - Superior I'ipe Products, LLC
Scrtentber 13.201$
LEDA Project
Presented to City Council
September 27, 2018
Project Silver
Project Silver, Superior Pipe Products, LLC, formerly Sterling Hose, will manufacture HDPE black
plastic hose pipe and is expanding in West Texas from their initial facility in Midland, TX. They
manufacture plastic pipes that can be used in the agriculture, oil & gas industries and on municipal
type projects. They will initially hire 41 and will eventually have 71 employees and invest $24.2
million. Their operation will run 24 hours a day and have six to ten rail cars weekly. They will be one
of LP&L's top ten users. The company has an urgency to locate at a temporary building to begin
manufacturing while they build their facility at the Lubbock Rail Port. The temporary facility will
need to be updated to be operational, including but not limited to, bringing the building up to fire code
and upgrading the electricity. Once the temporary facility is underway, construction for the new
facility, also at the Lubbock Rail Port, will begin and be operational within 24 months.
The Project's operations will support employment and other economic impacts in the community.
The 71.0 workers directly employed by the Project will earn approximately $60,000 per year on
average over the next 10 years. This direct activity will support 63.9 indirect and induced workers in
the community earning $43,000 on average over the next 10 years. The total additional payroll or
workers' earnings associated with the Project is estimated to be approximately $66.2 million over the
next 10 years. Accounting for various taxable sales and purchases, including activity associated with
the Project, worker spending, and visitors' spending in the community, the Project is estimated to
support approximately $361.1 million in taxable sales over the next 10 years.*
This employment creates an additional 63.9 indirect (suppliers/support operations) and induced
jobs (retail/entertainment/hospitality) fora total of approximately 135 jobs.
• The present value of net benefits** to the City of Lubbock over 10 years (fiscal) is $5,172,928.
• The present value of net benefits to all taxing districts over 10 years (fiscal) is $7,479,569.
*Earnings impact includes all salaries/wages, benefits, and other compensation to employees. Value
added impact (change in Lubbock County's Gross Regional Product) includes earnings, taxes, and
profits that the company has added to its inputs and is equivalent to revenue less outside purchases
(of materials and services). This represents the wealth created and is also called value-added output,
or productivity.
**The Present Value of Net Benefits is a way of expressing in today's dollars, dollars to be paid or
received in the future. Today's dollar and a dollar to be received or paid at differing times in the future
are not comparable because of the time value of money. The time value of money is the interest rate
or each taxing entity's discount rate.
This analysis was conducted using Total Impact, a model by Impact Data Source. The analysis was
performed using company data, rates and information provided to Lubbock Economic Development
Alliance. In addition, the model uses certain estimates and assumptions common for this type of
analysis and based on data collected for Lubbock County. Using this data, the impact from the facility
and the costs and benefits for relevant taxing districts were calculated using multipliers provided by
Economic Modeling Specialists Inc.
RE 18.26
RESOLUTION APPROVING SUPERIOR PIPE PRODUCTS, LLC PROJECT
THE STATE OF TEXAS
COUNTY OF LUBBOCK
At a regular meeting of the Board of Directors of LUBBOCK ECONOMIC
DEVELOPMENT ALLIANCE, INC., a Texas nonprofit corporation (LEDA), on Wednesday,
July 25, 2018, and modified on Wednesday, August 22, 2018, held in conformity with the bylaws,
after due notice as therein provided, a quorum being present and acting, the following resolution
was unanimously adopted:
WHEREAS, LEDA presented to members of the Board the proposal of a possible
Economic Development Grant and Contract to Superior Pipe Products, LLC, formerly Sterling
Hose. The terms and conditions of such Economic Development Grant and Contract, other than
the normal terms and conditions applicable to all such Economic Development Grant and
Contracts by the Corporation, are described generally as follows, to wit:
Grant Superior Pipe Products, LLC $360,000 for the purchase of 20 acres of land located
at E. 581h Street and Elm Avenue, payable in one lump once they have the permits to begin
construction, and an additional S360,000 when they provided LEDA their Certificate of
Occupancy. LEDA agrees to pay Superior Pipe Products, LLC a capital investment grant of
S400,000, payable annually in equal payments over a four-year period, for their capital investment
of approximately $24 million in real property and furniture, fixtures and equipment, and the
creation of 71 new full-time jobs to Lubbock.
WHEREAS, The Board of Directors of LEDA finds that an Economic Development Grant
and Contract offering the incentives for capital investment and the purchase of land described
above meet and comply with the qualifications and purposes of the Corporation for the granting
of such Economic Development Grants and Contracts.
Upon Motion by Director. Mr. Barry Orr, and Seconded by director, Mr. Calvin Davis. it
was approved.
IT WAS RESOLVED that LEDA offer and. if accepted by Recipient. enter into an
Economic Grant and Contract with Superior Pipe Products. LLC. This Economic Development
Grant and Contract will be on the normal terms and conditions of such Economic Development
Grant and Contract offered by LEDA to existing businesses and business prospects and authorise
the CEO to enter into and negotiate Performance Agreement.
BORNE. PRESIDENT & CEO
DAVIS, SECRETARY