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HomeMy WebLinkAboutResolution - 2023-R0287 - LEDA Program and Expenditure to Taylor Rig & Equipment, LLCResolution No. 2023-RO287 Item No. 5.12 June 13, 2023 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 an 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 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, it the amount set forth in Exhibit "A" attached hereto and incorporated herein by reference, to b, provided to Taylor Rig & Equipment, LLC is hereby approved pursuant to Section 501.073 of th, Texas Local Government Code. Passed by the City Council on A EST: MA, 6 C rtney Paz, CYty S cretary June 13, 2023 AP OVED AS TO C[ N" T: Brianna Brown, Director of Business Development AP ROVED AS TO FORM: lli Leisure, Senior Assistant City Attorney ccdocs.'RES.LEDA Expenditure -"Taylor Rig 5.24.23 Resolution No. 2023-RO287 RE 23-25 RESOLUTION APPROVING TAYLOR RIG & EQUIPMENT LLC 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, May 24, 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 Taylor Rig & Equipment LLC, a for -profit corporation (hereafter referred to as "Recipient"). LEDA hereby grants to Taylor Rip & Equipment, LLC a potential incentive of $100,000, with payments to be expressly made under the following terms and conditions. A. LEDA agrees to pay up to a maximum of $100,000 for Job Creation incentives at the rate of $1,000 for each Primary Full -Time Job created and maintained, to be paid out over a 5-year period. Job creation incentives may be made through the terms of the agreement, if needed. B. 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. The 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, Ms. Melissa Collier, and Seconded by director, Dr. John Opperman, 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 Taylor Rig & Equipment, LLC. 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. tJoSBORNE, PRESIDENT & CEO LIN A DAVIS. SECRETARY LEDA Project Phoenix Taylor Rig and Equipment Presented to City Council For more than 56 years, the Taylor name has been a part of the US well servicing industry. In 1965, Oscar Taylor founded Taylor Well Service in Drumright Oklahoma, and built his first well service rig a year later. Through the decades, the Taylor brand of products became recognized for their high performance, durable construction, and industry leading customer service. Opening in January 2023, Taylor Rig and Equipment continues this legacy, supporting the industry with cost effective high -quality service, repair, refurbishing, and certifications for well service rigs, frac pumps, and most other types of oilfield equipment. Taylor Rig and Equipment will spend $225,000 on upgrades to their facility and create 100 jobs with an average $67,500 salary annually. According to Impact Data Source's projections, "the Project's operations will support employment and other economic impacts in the community. The 100 workers directly employed by the Project will earn approximately $74,000 per year on average over the next 10 years. This direct activity will support 95.8 indirect and induced workers in the community earning $58,000 on average over the next 10 years. The total additional payroll or workers' earnings associated with the Project is estimated to be approximately $119.7 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 $19.5 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 ImpactT", 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.