HomeMy WebLinkAboutResolution - 2020-R0009 - LEDA Expenditure - Key Organics, Inc. - 01/14/2020 Resolution No. 2020-R0009
Item No. 6.14
January 14, 2020
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 Key Organics, Inc., is hereby approved pursuant to Section 501.073 of the Texas
Local Government Code.
Passed by the City Council on January 14,2020
DANIEL M. POPE, MAYOR
ATTEST:
ebe ea Garza, City Secret
APPROVED AS TO CONTENT:
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Brianna Gerardi, Busin ss Dev lopment Director
APPROVED AS TO FORM:
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Kelli Leisure, Assistant City Attorney
ccdocs/RES.LEDA Expenditure—Key Organics
2.20.19
LEDA Project
Presented to City Council
January 14,2020
Project Husky
Key Organics, Inc. , is an organics corn milling company. Key Organics has expressed interest in building a
31,000 square foot corn processing plant in the Lubbock Rail Port. The plant will be used to clean, cook, wet
mill, dry, cool, store and package corn masa.
Key Organics, Inc. plans to invest a total of$5.8 million in capital investment on the new building at the
Lubbock Rail Port and plan on creating 38 new jobs with an average salary of$30,402.
The Lubbock Economic Development Alliance Board of Directors has voted to incent Key Organics, Inc. 5
acres of land at the Lubbock Rail Port with an estimated value of$337,500.
Annual economic impacts of the business once fully operational on Lubbock County include a total earnings
impact* of $12,558,729 and a total value-added impact (change in Lubbock County's Gross Regional
Product) of$3,866,727.
• This employment creates an additional 38 indirect (suppliers/support operations) and induced
jobs (retail/entertainment/hospitality) for a total of 76 jobs.
• The present value of net benefits** to the City of Lubbock over 10 years (fiscal) is $1,309,694.
• The present value of net benefits to all taxing districts over 10 years (fiscal) is$1,773,322.
`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 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.
RE 19-43
RESOLUTION APPROVING KEY ORGANICS, INC. PROJECT
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,
December 18, 2019, 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 Key Organics, Inc. The tern-is 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:
Grant Key Organics, Inc. 5 acres of land, with the estimated value of$337,000, in the
Lubbock Rail Port for their capital investment of$5.8 million in real property and furniture,
fixtures and equipment and the creation of 38 new full-time jobs to Lubbock.
WHEREAS,The Board of Directors of LEDA finds that an Economic Development Grant
and Contract offering 5 acres of land with an estimated value of$337,000, in the Lubbock Rail
Port for their capital investment of$5.8 million and the creation of 38 new full-time jobs 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, Dr. John Opperman, and Seconded by director, Mr. Brett Cate,
it was approved,
IT WAS RESOLVED that LEDA offer and, if accepted by Recipient, enter into an
Economic Grant and Contract with Key Organics, 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.
JOHN BORNE, PRESIDENT& CEO
L
LIN A DAVIS. SECRETARY