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HomeMy WebLinkAboutResolution - 2022-R0375 - Economic Development Expenditure to True North SteelResolution No. 2022-R0375 Item No. 5.14 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 True North Steel is hereby approved pursuant to Section 501.073 of the Texas Local Government Code. Passed by the City Council on September 13, 2022 ATTEST: D t&� - )�� Reb ca Garza, City Sec et AS TO Brianna Gerardi, Directkof Ikusiness Development AP ROVED S TO FORM: 1* - elli Leisure, Assistant City Attorney ccdocs/RES.LEDA Expenditure -True North Steel 8.30.22 RE 22-30 RESOLUTION APPROVING TRUE NORTH STEEL 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 27, 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 and ratified on Wednesday, August 24, 2022: WHEREAS, LEDA presented to members of the Board the proposal of a possible Economic Development Grant and Contract to True North Steel, a foreign for -profit corporation. True North Steele, 401 N. Loop 289, Lubbock, Texas, is anticipated to result in 38 new Primary Jobs for the City of Lubbock with a Target Annual Compensation of $849,300, in the aggregate, or a total of $7,643700 over five years. Total capital investment is estimated to be $1,607,000.00. LEDA hereby grants True North Steel up to a maximum of $95,000 for Job Creation incentives at a rate of $2,500 for each Primary Full -Time Job created and maintained, to be paid out in equal amount of $500 per year over a five-year period. The incentive payments may be made during the term of the Agreement, if needed. The payments are conditioned upon the creation of Primary Jobs after Recipient's written substantiation of such employment and under the following terms and conditions: a. Recipient agrees to establish a Baseline Employment Level and Census and shall timely provide such information to LEDA's designated accounting representative when requested. Recipient agrees to maintain the Baseline Employment Level through the term of this Agreement and create and maintain the additional full-time Target Job Positions intended to qualify for the incentive, as offered by LEDA. Upon Motion by Director, Mr. James Conwright, and Seconded by director, Mr. Matt Bumstead, 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 True North Steel. 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. Wmroe - :.PRESMENT LEDA Project Compass True North Steel Presented to City Council True North Steel has provided steel -based solutions for customers' projects in a variety of industries. With more than 75 years of manufacturing, engineering and project management experience, True North delivers high -quality construction and storage solutions across the United States. True North teams work closely with engineers, architects and construction managers, tailoring the level of service and assistance to each client's unique needs. From concept to fabrication and assembly, True North Steel will do as much as their customers require. Decades of experience, coupled with a detailed understanding of each project, ensure long-lasting steel solutions customized to the individual project requirements. True North purchased Beck Steel in 2021 and is expanding their product line to produce tanks. They anticipate investing $1.6 million and create 38 new jobs with an average salary of $44,700. The Project's operations will support employment and other economic impacts in the community. *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.