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HomeMy WebLinkAboutResolution - 2024-R0134 - LEDA Program/Expenditure, Provided To Vulpes Group Holding Corporation - 03/26/2024Resolution No. 2024-R0134 Item No. 5.21 March 26, 2024 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 approve th� 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 THEREFOIZE: BE IT RESOLV�D BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the program or expenditure of the Lubbock Economic Development Alliance, in amount set forth in Exhibit "A" attached hereto and incorporated herein by reference, to provided to Vulpes Group Holding Corporation is hereby approved pursuant to Section 501. of the Texas Local Government Code. Passed by the City Council on March 26, 2024 ATTE ': Courtney Paz, City Secretary TRAY P I� AYOR AP OVED AS TO CO TI� . Brianna Brown, Dircctor of Business Development APPROV�D AS TO FORM: K lli Leisure, Senior Assistant City Attorney ccdocslRES.LEDA Expenditure-Vulpes GHC 2.28.24 Resolution No. 2024-R0134 RE 24-08 RESOLUTION APPROVING ViJLPE5 C4RP 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, February 28, 2024, 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 Vulpes Group Holding Corporation, a for-profit corporation, (hereinafter referred to as "Recipient"), by and through their duly authorized officers and affiliate organizations under the terms and conditions that follow. A. LEDA, a Texas non-profit corporation as well as a tax exempt 501(c) 4 entity, was created by the City of Lubbock, Texas, as an Industrial Development Corporation under the Act for the purpose of creating and retaining positions and encouraging new businesses to be established in Lubbock, Texas, to stimulate business and commercial activiries, as well as all other purposes allowed by the Act. B. Recipient is preparing a new "Project" which shall include the expansion and remodel of an existing facility located at 9712 4th Dr., BLDG 930, Lubbock, TX 79416, (NAICS 325320). Its business project is anticipated to result in 62 new Primary Jobs for the City of Lubbock with a Target Annual Compensation of $3,668,354 at full operation. Total capital investment is estimated to be $9,920,000. C. Recipient is a for-profit corporation authorized to do business in Texas. D. Recipient represents that it will utilize the incentive provided towazds costs involved and associated with the Project. E. Recipient represents that it is authorized to do business in Texas and has authorization to enter into this Agreement on its behalf. F. Recipient represents that it has sought from LEDA economic assistance pursuing Recipient's Project. G. Recipient represents that it has conferred with attorneys of its ovcm choosing and is fully knowledgeable of the terms of the Act and understands the reporting requirements of the Act, as well as all conditions precedent and subsequent as required to be eligible for the incentives offered by LEDA, including the Payback Provisions. H. Recipient represents that it acknowledges that its failure to perform any reporting requirements within a reasonable period of time after the request is made could result in payment adjustments. I. Recipient understands and agrees that any variations as to any term of this Agreement or any terms or conditions of the incentives as stated must be mutually agreed to in written supplements or addenda since no oral agreements, amendments, or representations will be binding on either party. J. Recipient agrees to participate in any LEDA sponsored wage and benefit surveys, as well as any marketing materials that focus on economic development for the City of Lubbock. WHEREAS, LEDA represents that it is established as an Industrial Development Corporation under the Act and further represents that the costs applied toward Recipient's Project as stated in this Agreement have been found by the Board of Directors of LEDA sitting as fact finders have detemuned the Project to be in compliance with the requirements and purposes of the Act, the provision of LEDA's charter, as well as for the benefit of the City of L,ubbock, Lubbock County, Texas, and trade area. VVI-IEREAS, LEDA represents that it has authority to enter into this Agreement. LEDA understands and agrees that any variation in terms of this Agreement or the incentives offered to Recipient or commitment by Recipient will only be binding if mutually agreed to in writing. WHEREAS, LEDA hereby grants to Recipient a potential incentive of $186,000 (through job creation) with payments to be expressly made under the following terms and conditions: A. LEDA agrees to pay up to a maximum of $186,000 for Job Creation incentives to Recipient at the rate of $3,000 for each Primary Full-Time Job created and maintained in the first five (5) years, to be paid out over three (3) years as the jobs are created. The incentive payments may be made during the term 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: 1. 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. 2. Should Recipient fail to meet its Target Job Positions during any year or years, but ultimately meet its overall Tazget Job Positions by the end of year five (5), LEDA, shall at its discretion have the right to allow recapture of forfeited incentives not to exceed the maximum amount approved by the Board. Should Recipient exceed its Target Job Positions during any year or years, LEDA, shall at its discretion have the right to allow accelerated job creation incentive payments, not to exceed the maximum amount approved by the Boazd. Upon Motion by Director, Mr. Chris Carpenter, and Seconded by director, Mr. Brett Cate, 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 Vulpes Group Holding Corporation. 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. � IOHN SBORNE, PRESIDENT & CEO LiN A DAVIS. SECRETARY LEDA Project Magma Vulpes Corp Presented to City Council Vulpes Corporation is a veteran chemical research team to develop and commercialize new agricultural, industrial, and pharmaceutical chemicals, based in S� Louis, MO founded in 2019. It uses its manufacturing expertise to both commercialize novel agrochemical materials and to onshore existing agrochemical production. Vulpes collaborates with 15 research and agricultural extension teams across 10 U.S. research institutions to develop Carbon Black Acid, a fertilizer and seed additive that can improve plants' nutrient and water uptake by up to 200%, reduce fertilizer loss and its environmental impact, and reduce fertilizer expenditure by farmers. The selection of Vulpes in the Ag Innovation Challenge is an honor and a recognition of Vulpes's innovative capacities. Vulpes's Carbon Black Acid is a new product with a direct causal mechanism that delivers nutrients into the roots and straws of plants while providing a stable and consistent performance across crops and growing conditions. Vulpes develops local and innovative processes to ensure Carbon Black Acid enjoys a competitive price in a cost-sensitive market and is chemically compatible with existing chemical and biological processes in the �eld. Carbon Black Acid, however, is merely the first among many of Vulpes's upcoming manufacturing innovations. Vulpes is also developing a next-generation RNA pesticide manufacturing process. Through using industrial byproducts and a completely new pathway, Vulpes hopes to reduce the cost of RIVA pesticide by more than 90%. Vulpes is also collaborating with multiple multinational companies to onshore their agricultural input manufacturing from Asia. Vulpes Corporation is starting a manufacturing operation and investing $9,920,000 in building up- grades and new equipment and creating 62 new jobs with an average wage of $59,167. LEDA will incent Vulpes Corp. with a job creation grant of $3,000 per job created to be paid out over a 3-year period with an estimated maximum value of $186,000. The Project's operations will support employment and other economic impacts in the community. The 62 workers directly employed by the Project will earn approximately $59,167 per year on average over the next 10 years. This direct activity will support 64.1 indirect and induced workers in the commu- nity earning $65,957 on average over the next 10 years. The total additional payroll or workers' earnings associated with the Project is estimated to be approximately $8.3 million over the next 10 years. Ac- counting 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 $43.7 million in taxable sales over the next 10 years. Value-Added, increase in annual gross area product, is expected to be $17,271,638 annually at full operations. *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. 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.