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HomeMy WebLinkAboutResolution - 2023-R0248 - Economic Development Incentive to Dura-LineResolution No. 2023-RO248 Item No. 5.9 May 23, 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 apprc the program or expenditure, as proposed to the City Council by LEDA, as set forth in Exhi "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 DuraLine is hereby approved pursuant to Section 501.073 of the Texas Lo Government Code. Passed by the City Council on AT/WEST: Co Pneyvz, City retary May 23, 2023 TRAYr, MAYOR APP OVED AS TO CON NT: Brianna Brown, Director of Business Development APPROVED AS TO FORM: V& h� e� K lli Leis e, Senior Assistant City Attorney ccdocs/RES.LEDA Expenditure-DuraLine 5.9.23 Resolution No. 2023-RO248 RE 23-19 RESOLUTION APPROVING DURA-LINE 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 Tuesday, April 25, 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 Dura-Line. Dura-Line proposes to create one hundred forty-one (141) new Primary Jobs and a Capital Investment of $52,000,000 in building upgrades and equipment in their project at the Lubbock Business Park. 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 Dura-Line, approximately 3.013 acres of land, in Section 7, Block A , in the Lubbock Business Park included in the three-way agreement with LEDA, Dura-Line and Developer in the Performance Agreement and as part of the property leased to the Recipient on a 183-month lease term with two five-year options to extend the lease. Job Creation Incentives at the rate of $5,000 for each Full -Time Job created and maintained, to be paid at the rate of $1,000 per -year, over a five-year period with an estimated maximum value of $705,000. LEDA will advocate for a tax abatement, but if no tax abatement is offered from the City, LEDA agrees to pay to Recipient up to a maximum of $1,000,000 as a Capital Investment Incentive. LEDA agrees to pay Recipient a Relocation Grant of $50,000 for assistance with Recipient's relocation strategy. WHEREAS, The Board of Directors of LEDA finds that an Economic Development Grant and Contract offering to convey to Dura-Line and the Developer approximately 3.013 acres of land in the Lubbock Business Park, City of Lubbock, Lubbock County, Texas. 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 Dura-Line. 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. JOHN SBORNE, PRESIDENT & CEO 4LIWNADAVIS. SECRETARY LEDA Project Dart Dura-Line Presented to City Council Dura-Line, a leading global manufacturer and distributor, is transforming the structure of communication. Technology, data, and constant communication are more intertwined with our daily lives than ever before in human history. Dura-Line provides the essential infrastructure -conduit, Future Path, cable -in -conduit, and accessories -to make this possible. Through their innovative product solutions and unparalleled customer insight, Dura-Line creates what connects us, serving a wide variety of markets including telecommunications, enterprise networking, energy and transportation. Dura-Line will spend $52.5 million in capital investment on their building and equipment and create 141 new jobs with an average salary of $59,000 annually. According to Impact Data Source's projection, Dura-Lines operations will support employment and other economic impacts in the community. The 141.0 workers directly employed by this Project will earn approximately $59,000 per year on average over the next 10 years. This direct activity will support 127.3 indirect and induced workers in the community earning $41,000 on average over the next 10 years. The total additional payroll or workers' earnings associated with this Project is estimated to be approximately $118.6 million over the next 10 years. Accounting for various taxable sales and purchases, including activity associated with this Project, worker spending, and visitors' spending in the community, the Project is estimated to support approximately $957.7 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.