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HomeMy WebLinkAboutResolution - 2020-R0072 - LEDA Expenditure - Corteva Agriscience - 02/25/2020 Resolution No. 2020-R0072 Item No. 7.16 February 25, 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 Pioneer Hi-Bred International Inc., DBA Corteva Agriscience, is hereby approved pursuant to Section 501.073 of the Texas Local Government Code. Passed by the City Council on February 25, 2020 DANIEL M. POPE, MAYOR ATTEST: Ind Rebe ca Garza, City Secr tary APPROVED AS TO C T T: Brianna Gerardi, Busin ss D velopment Director APPROVED AS TO FORM: kl7i VMJM�L, elli Leisure, Assistant City Attorney cedocs/RES.LEDA Expenditure—Cortma Agriscience 02.04.20 RE 20-03 RESOLUTION APPROVING CORTEVA AGRISCIENCE 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, January 29, 2020, 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 Corteva Agriscience. 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: Grant Corteva Agriscience, along with their developer, approximately 2.4 acres of land in the Lubbock Rail Port with the estimated value of $146,362 and a capital investment grant of $250,000 for their capital investment of $5,062,000 and the creation of 2 new frill-time jobs with average salaries of $67,500 in Lubbock, plus additional seasonal workers at the average hourly rate of$15.00. WHEREAS, The Board of Directors of LEDA finds that an Economic Development Grant and Contract offering , approximately 2.4 acres of land in the Lubbock Rail Port with the estimated value of$146,362 and a capital investment grant of$250,000 for their capital investment of$5,062,000 and the creation of 2 new full-time jobs with average salaries of$67,500 in Lubbock, plus additional seasonal workers at the average hourly rate of$15.00 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. Calvin Davis, and Seconded by director, Ms. Suzann Kirby, 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 SBORNE, PRESIDENT& CEO LIN A DAVIS. SECRETARY LEDA Project Presented to City Council February 25, 2020 Project Bonnet II Pioneer Hi-Bred International, Inc. DBA Corteva Agriscience (Project Bonnet II), an agriscience company that has a local presence and currently investing in Lubbock, is considering an expansion of research and development capabilities within the Lubbock Rail Port. Corteva was considering Lubbock and a site in California for their corporate investment project. The Lubbock Economic Development Alliance Board of Directors has voted to incent Corteva Agriscience, along with their developer, approximately 2.4 acres of land in the Lubbock Rail Port, with the estimated value of$146,362 and a capital investment grant of$250,000, for their capital investment of$5,062,000 and the creation of 2 full-time jobs with an average salary of$67,500 plus additional seasonal workers at average hourly wage of$15.00 Economic impact of the business over 10 years in the City of Lubbock include a total earnings impact* of $1,478,212 and at full operations, an annual total value-added impact (change in Lubbock County's Gross Regional Product) of$284,438. • This employment creates an additional .6 indirect (suppliers/support operations) and induced jobs (retail/entertainment/hospitality) for a total of 2.6 jobs. • The present value of net benefits** to the City of Lubbock over 10 years (fiscal) is $264,862. • The present value of net benefits to all taxing districts over 10 years (fiscal) is $545,347. *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.