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HomeMy WebLinkAboutResolution - 2022-R0374 - Economic Development Expenditure to W.L. Plastics CorporationResolution No. 2022-RO374 Item No. 5.13 September 13, 2022 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 W.L. Plastics Corporation is hereby approved pursuant to Section 501.073 of the Texas Local Government Code. Passed by the City Council on ATTEST: Reb ca Garza, City Secre ED AS TO September 13, 2022 Brianna Gerardi, Director�of B*iness Development MVE%DASTO FORM: elli LeisuYe, Assistant City Attorney ccdocs/RES.LEDA Expenditure-WL Plastics 8.30.22 RE 22-32 RESOLUTION APPROVING W.L. PLASTICS 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 24, 2022, 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 W.L. Plastics. W.L. Plastics proposes an expansion project at the Lubbock Rail Port that will result in ninety-five new (95) Primary Jobs with a capital investment of $40,000,000. 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: LEDA hereby grants and conveys to W.L.Plastics by Special Warranty Deed, twenty-five (25) acres of land, more or less, (east of the rail adjacent to Hampton Farms, Lubbock Rail Port Addition to the City of Lubbock, Lubbock County, Texas. The property includes fifteen (15) acres of rail served land WHEREAS, The Board of Directors of LEDA finds that an Economic Development Grant and Contract offering to convey to W.L. Plastics by Special Warranty Deed, twenty-five (25) acres of land, more or less, (east of the rail adjacent to Hampton Farms, Lubbock Rail Port Addition to the City of Lubbock, Lubbock County, Texas, which includes fifteen (15) acres of rail served land. The incentive of conveying the land 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. Chris Carpenter, and Seconded by director, Mr. James Conwright, and unanimously approved by all directors. IT WAS RESOLVED that LEDA offer and, if accepted by Recipient, enter into an Economic Grant and Contract with W. L. Plastics. 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 LEDA Project Blackhawk 2.0 W. L. Plastics Presented to City Council W.L. Plastics is the ideal producer of polyethylene pipe in North America. Their HDPE pipe provides durability to avoid the high cost of replacing or rehabilitating. The piping safely delivers fluids without the leakage inherent with alternative piping materials. The lighter -weight result in savings for shipping, handling, and installation. And the inner surface of W.L. Plastics HDPE pipe provides a low resistance to liquid flow, reducing pumping and operating costs. The Company's best -in -class manufacturing processes and experienced production personnel help make W.L. Plastics one of the most efficient producers of HDPE pressure pipe. Close proximity to customers facilitates quicker response times and speed to market. W.L. Plastics continues to make investments in equipment to improve efficiency, productivity and throughput. W.L. Plastics was considering expanding their operations in Lubbock or Kentucky and chose Lubbock. W. L. Plastics chose a 25-acre site at the Lubbock Rail Port, east of Hampton Farms for this expansion. W. L. Plastics will create 95 new jobs and invest $40 Million in a new facility and equipment. `The Project's operations will support employment and other economic impacts in the community. The 38 workers directly employed by the Project will earn approximately $49,000 per year on average over the next 10 years. This direct activity will support 42.4 indirect and induced workers in the community earning $35,000 on average over the next 10 years. The total additional payroll or workers' earnings associated with the Project is estimated to be approximately $31.7 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 $7.2 million in taxable sales over the next 10 years." *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.