HomeMy WebLinkAboutResolution - 2013-R0326 - Approve LEDA Program/Expenditure - Tyco International LTD - 09/26/2013esolution No. 2013-RO326
eptember 26, 2013
item No. 5.27
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 Tyco International Ltd. Manufacturing and Operations is
hereby approved pursuant to Section 501.073 of the Texas Local Government Code.
Passed by the City Council on September 26, 2013
GLE OBER ON, MAYOR
ATTEST:
Reb ca Garza, City Secretkry
APPROVED AS TO CONTENT:
Assistant City Manager
i A O FORM:
Of
Chad Weaver, Assistant City Attorney
vw:ccdocs'RES. LEDA Expenditure -Tyco
August 27, 2013
LEDA and MLI Projects
Presented to City Council
August 2013
Tyco is a leading manufacturer of water-based fire suppression technologies for commercial and
residential customers. While Tyco has another sprinkler plant located in England, Tyco International Ltd.
Manufacturing and Operations in Lubbock is the'Number 1' producer of fire sprinklers in the United
States. The two facilities competed for the expansion project.
Over the next year, Tyco will invest $3,150,000 in new equipment. Over the next 5 years, Tyco will hire
81 new employees with annual salaries of $2,290,775.
At the August meeting, the Lubbock Economic Development Alliance Board of Directors voted to incent
Tyco International Ltd. Manufacturing and Operations $88,500 for 27 of the 81 jobs, to be paid out over a
5 -year period as the jobs are created.
In addition to the direct impact, this expansion creates an additional 84 indirect (suppliers/support
operations) and induced jobs (retail/entertainment/hospitality) for a total of 165 new jobs.
• The annual economic impacts of the business once fully operational on the Lubbock County
include a total earnings impact* of $3.8 million and a total value added impact (change in Lubbock
County's Gross Regional Product) of $7.2 million.
• The present value of net benefits** to the City of Lubbock over 10 years (fiscal) is $236,398.
• The present value of net benefits to all taxing districts over 10 years (fiscal) is $403,010.
*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 ImpactT"', 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.