Loading...
HomeMy WebLinkAboutResolution - 2016-R0278 - Approve Market Lubbock Inc. Expenditure - Severn Peanut Company - 08/11/2016Resolution No.2016-R0278 Item No.4.23 August 11.2016 RESOLUTION WHEREAS,pursuant to Article IV,Section 5 of the Amended and Restated Bylaws of Market Lubbock Economic Development Corporation ("Corporation"),the City of Lubbock, as the Corporation's authorizing unit,has the authority to approve all programs and expenditures of Marks,'Uubbock,Inc.; 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 Market Lubbock, Inc., as set forth in Exhibit"A" attached heretoand incorporated hereinby reference;NOW THEREFORE: BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the program or expenditure of Market Lubbock, Inc., in the amount set forth in Exhibit "A" attached hereto and incorporated herein by reference, to be provided to Severn Peanut Company,a division of Meherrin Agriculture,is herebyapprovedpursuantto Section5 of the Amended and Restated Bylaws of the Corporation. Passed by the City Council on August 11,2016 . DANIEL M.POPE,MAYOR ATTEST: 'jJL Rebeoca Garza,City Secretary APPROVED AS TO CONTEN ^OM^^T /U/a Quincy White;D/feputy City Manager APPROVED AS TO FORM: Justin Pnuitt.Assistant City Attorney ccdocs/RES.MarketLubbockExpenditure- SevernPeanutCompany July 22.2016 Resolution No. 2016-RO278 rMarlmtWLUOboOX Project Charlie Brown Presented to City Council August 11, 2016 Severn Peanut Company, a division of Meherrin Agriculture, is expanding its operations by opening a new food processing facility in Lubbock, which is scheduled to open at the end of 2016. The expansion will create 80 new jobs over the next three years and the company will make a total capital investment of $8.75 million. Severn Peanut Company, more commonly known as Hampton Farms, is expanding its operations by purchasing the building at Lubbock Rail Port from United Properties Southwest. They have plans to modify the Rail Port building to accommodate their almond butter production line and storage and will initially invest $3.05 million in equipment and renovations to the building. Severn plans to expand their presence in Lubbock in 2018 and build an additional structure to accommodate a peanut butter manufacturing line. The new building will also be located at the Lubbock Rail Port, north of the existing building, and will include an additional $5.7 million in capital. The Market Lubbock, Inc. Board of Directors, on July 20, 2016, has voted to incent Severn with 10.4 acres of land at the Lubbock Rail Port with an estimated value of $874,000. Annual economic impact of the business once fully operational on Lubbock County includes a total earnings impact* of $7,368,679 and a total value added impact (change in Lubbock County's Gross Regional Product) of $25,401,271. • This employment creates an additional 125 indirect (suppliers/support operations) and induced jobs (retail/entertainment/hospitality) for a total of 205 jobs. • The present value of net benefits** to the City of Lubbock over 10 years (fiscal) is $709,519. • The present value of net benefits to all taxing districts over 10 years (fiscal) is $1,109,346. *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.