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HomeMy WebLinkAboutResolution - 2018-R0357 - Expenditureof LEDA To Be Provided To Pioneer Hi-Bred International, Inc - 09/27/2018Resolution No. 2018-RO357 Item No. 6.37 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: BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the program 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 Pioneer Hi -Bred International, Inc., is hereby approved pursuant to Section 501.073 of the Texas Local Government Code. Passed by the City Council on September 27, 2018 DANIEL M. POPE, 64AYOR ATTEST: JAVLz Rebe ca Garza, City Secre[at APPROVED AS TO CONTENT: 1 Jus in �VCDAS usiness Development Di ector APPR TO FORM: Ke li Leisure, Assistant City Attorney ccd.WRES. LEDA Expend,t.. - Pionccr Hi-Nrcd Immmulionnl, Inc. September 13, 2018 LEDA Project Presented to City Council September 27, 2018 Project Bonnet With the recent merger of Dow/DuPont in August 2017, Pioneer Hi -Bred International and Dow Agro Sciences will be merging their two locations from Lubbock's Dow Ag and Plainview's Pioneer into a new facility in the Lubbock Rail Port and operating as Pioneer Hi -Bred International, Inc. The Dow/DuPont Seed Research Center will be a multi -crop breeding and testing hub for the Rolling Plains, High Plains and Panhandle of Texas with a major focus on cotton, corn and sorghum. The new facility will include approximately 30,000 square feet of office and lab space, with a cold storage room, threshing/shelling treatment and seed handling rooms. The project will bring 11 new full-time equivalent employees from the current Plainview operation and will add 5 employees within the first six years of operation for a total of 16 full-time employees. They will invest $4.5 million in real property improvements and $1.6 million in furniture, fixtures and equipment for a total of $6.1 million in capital investment. The Project's operations will support employment and other economic impacts in the community. This employment creates an additional 4.3 indirect (suppliers/support operations) and induced jobs (retail/entertainment/hospitality) for a total of approximately 20 jobs. • The present value of net benefits" to the City of Lubbock over 10 years (fiscal) is $386,810. • The present value of net benefits to all taxing districts over 10 years (fiscal) is $731,209. *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 ImpactTM, 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 18-31 RESOLUTION APPROVING PIONEER HI -BRED INTERNATIONAL, INC. 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, 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 Pioneer Hi -Bred International, Inc. 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 Pioneer Hi -Bred International, Inc. with six acres of land in the Lubbock Rail Port (Lots C and D), with the estimated value of $365,904, for their capital investment of $6. l million and the creation of 16 new full-time jobs. LEDA will also provide a grant of $30,000 to the developer of Pioneer Hi -Bred International, Inc.'s choice to apply towards site correction to bring the elevation above the FEMA flood zone. WHEREAS, The Board of Directors of LEDA finds that an Economic Development Grant and Contract offering the incentives for capital investment and the six acres 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. Jim Gilbreath, and Seconded by director, Mr. Mark Griffin, it was approved, IT WAS RESOLVED that LEDA offer and, if accepted by Recipient, enter into an Economic Grant and Contract with Pioneer Hi -Bred International, Inc. 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 authorize the CEO to enter into and negotiate Performance Agreement. PRESIDENT & CEO DAVIS, SECRETARY