HomeMy WebLinkAboutResolution - 2016-R0042 - Monsanto Expenditure - 01/28/2016No.2016-R0042
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28, 2016
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 Monsanto Company is hereby approved pursuant to Section 501.073 of the Texas
Local Government Code.
Passed by the City Council on January 28, 2016
ATTEST:
Rebe ca Garza, City Secret
APPROVED AS TO CONTENT:
uincy White, 12ejkty City Manager
APPROVED AS TO FORM:
Just n Pruitt, ssistant City Attorney
ccdocs/RES. LEDA Expenditure — Monsanto Company
January 14, 2016
GLEIPCMER,66N, MAYOR
LUBBOCK
CE ECONOMIC
' JDEVELOPMENT
ALLIANCE
LEDA Project
Presented to City Council
January 28, 2016
Project Pepsi
Monsanto, one of the world's largest sustainable agriculture companies, is expanding their Lubbock
operations to include a new cotton seed processing facility. The company will invest $140 million into
the building and equipping the new 500,000 square foot state-of-the-art facility. This is the largest capital
investment project announced since LEDA's inception in 2004.
The new facility, located on 150 acres in North Lubbock along Interstate 27, will be established as
Monsanto's primary U.S. hub for all cotton seed processing operations, which includes cleaning, treating
and gabbing of its Deltapine brand cotton seed. Monsanto is set to break ground in March and anticipates
being operational by the summer of 2017.
Monsanto is also creating 40 new full-time jobs and 15-25 new part-time jobs that will operate out of the
facility. The full-time positions include managers and technicians with annual average salaries of
$55,000.
The Lubbock Economic Development Alliance Board of Directors has voted to incent Monsanto for the
construction of the new facility, to be located within the Lubbock city limits, and provide grants for job
creation and capital investment potentially totaling $1,920,000 with payments expressly made under
certain terms and conditions as earned over time.
Annual economic impacts of the business once fully operational on Lubbock County include a total
earnings impact* of $3,941,586 and a total value added impact (change in Lubbock County's Gross
Regional Product) of $11,200,035.
• This employment creates an additional 59 indirect (suppliers/support operations) and induced
jobs (retail/entertainment/hospitality) for a total of 99 jobs.
• The present value of net benefits** to the City of Lubbock over 10 years (fiscal) is $3,265,561.
• The present value of net benefits to all taxing districts over 10 years (fiscal) is $5,958,777.
*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.
Wells Fargo Center * 1500 roadway. 6th Floor *Lubbock. Texas 79401
Phone 806.749.4500 *Toll Free 800.687.533D * Fax 806749.4501 * www.lubbockeda.org