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HomeMy WebLinkAboutResolution - 2023-R0223 - Economic Development Expenditure to X-Fab Manufacturing Inc.Resolution No. 2023-RO223 Item No. 6.3 May 9, 2023 RESOLUTION WHEREAS, pursuant to Section 501.073 of the Texas Local Government Code the of Lubbock, as the corporation's authorizing unit, has the authority to approve all programs 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 approv4 the program or expenditure, as proposed to the City Council by LEDA, as set forth in Exhibi "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, the amount set forth in Exhibit "A" attached hereto and incorporated herein by reference, to provided to X-Fab Manufacturing, Inc. is hereby approved pursuant to Section 501.073 of Texas Local Government Code. Passed by the City Council on A ST: —T,/t Courtney Paz, City Sec tary May 9, 2023 A OVED AS TO TENT: Brianna Brown, Director of Business Development APPROVED AS TO FORM: wv&,�At lli Leisure, Senior Assistant City Attorney ccdocs/RES.LEDA Expenditure-X-Fab 3.23.23 RE 23-16 RESOLUTION APPROVING X-FAB MANUFACTURING, 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, March 22, 2023, 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 X-Fab Manufacturing, Inc. LEDA agrees to grant X-Fab Manufacturing, Inc. an incentive of $75,000 for professional services related to the interpretation, understanding and lobbying services related to the CHIPS and Science Act of 2022. The incentive will be paid upon written verification by X-Fab Manufacturing, Inc. of the completion of these services, or 12 months after the original professional services agreement date. 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: WHEREAS, The Board of Directors of LEDA finds that an Economic Development Grant and Contract offering Fab Manufacturing, Inc. an incentive of $75,000 for professional services related to the interpretation, understanding and lobbying services related to the CHIPS and Science Act of 2022. The incentive for professional services 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. Sonny Garza, 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 X-Fab Manufacturing, 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. ]OHN SBORNE. PRESIDENT & CEO �k&'a&k�2 LIN A DAVIS. SECRETARY LEDA Project Vanilla X-Fab Manufacturing, Inc. Presented to City Council X-FAB Manufacturing, Inc. is one of the world's leading specialty foundry groups for analog/mixed-signal semiconductor technologies with a clear focus on automotive, industrial, and medical applications. As a pure - play foundry, X-Fab provides manufacturing and strong design support services to our customers that design analog/mixed-signal integrated circuits (ICs) and other semiconductor devices for use in their own products or the products of their customers. X-Fab has an established track record with over 30 years of experience providing proprietary manufacturing processes and advanced design and engineering support. X-Fab anticipates to add 400 new jobs with average salary of $88,000 annually and capital investment of 1 Billion over the next 5 years. The Projects operations will support employment and other economic impacts in the community. The 400.0 workers directly employed by the Project will earn approximately $96,000* per year on average over the next 10 years. The direct activity will support 658.1 indirect and induced workers in the community earning $27,000 on average over the next 10 years. The total additional payroll or workers' earnings associated with the Project is estimated to be approximately $447.4 million 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 Project's operations will support employment and other economic impacts in the community. ** 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.