HomeMy WebLinkAboutResolution - 2015-R0204 - Approve LEDA Funding - Chromatin - 06/11/2015Resolution No. 2015-RO204
Item No. 6.23
11, 2015
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 Chromatin is hereby approved pursuant to Section 501.073 of the Texas Local
Government Code.
Passed by the City Council on June 11, 2015
i
G R ERTSON, MAYOR
ATTEST:
A-
Reb t
a Garza, City Secretat)
APPROVED AS TO CONTENT:
Quincy Whi eputy City Manager
APPROVED AS TO FORM:
`g
Jus 11S.
uitt, Assistant City Attorney
ccdo LEDA Expenditure -Chromatin
May 27, 2015
LUBBOCK
CE
ECONOMIC
LEDAProject DEVELOPMENT
Presented to City Council ALLIANCE
June 11, 2015
Project Chrome
Chromatin is looking to expand operations in the City of Lubbock and in Lubbock County (New Deal).
Two specific projects in process/consideration at the moment:
• The consolidation of the company's R&D facilities to Lubbock from Champaign, IL
• The consolidation of the company's backroom operations (IT, AP & AR) as well as continued
expansion of the New Deal manufacturing facility.
This includes a mix of high compensation scientists and mid-level managers and clerical worker roles
that will be established in Lubbock.
The Project's operations will support employment and other economic impacts in the community. The 33
workers directly employed by the Project will earn approximately $91,000 per year on average over the
next 10 years. This direct activity will support 40.0 indirect and induced workers in the community
earning $46,000 on average over the next 10 years. The total additional payroll or workers' earnings
associated with the Project are estimated to be approximately $42.8 million over the next 10 years.
The Lubbock Economic Development Alliance Board of Directors has voted to incent Chromatin $84,000
for 21 of the 33 total jobs created, that qualified for incentives, to be paid out over a 5 -year period.
Annual economic impacts of the business once fully operational on Lubbock County include a total
earnings impact* of $4,770,133 and a total value added impact (change in Lubbock County's Gross
Regional Product) of $10,221,551.
• This employment creates an additional 40 indirect (suppliers/support operations) and induced
jobs (retail/entertainment/hospitality) for a total of 73 jobs.
• The present value of net benefits** to the City of Lubbock over 10 years (fiscal) is $678,449.
• The present value of net benefits to all taxing districts over 10 years (fiscal) is $964,324.
*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.
EXHIBIT