HomeMy WebLinkAboutIR 10031 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 10031
p,ATo the Mayor and Members of the City Council August 1, 2017
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SUBJECT: TEXAS ENTERPRISE ZONE NOMINATION FOR SMITH & NEPHEW,
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The City Council of the City of Fort Worth (City) has previously passed Ordinance No. 15733
electing to participate in the Texas Enterprise Zone Program. On May 12, 2015 the City Council
adopted Ordinance No. 21743-05-2015, amending Ordinance No. 15733 by adding additional
potential local incentives that could be made available to qualified businesses under the Texas
Enterprise Zone Program. The Office of the Governor Economic Development and Tourism
through the Economic Development Bank will consider Smith & Nephew, Inc. (Smith & Nephew)
as an enterprise project pursuant to a nomination and an application made by the City.
The Texas Enterprise Zone Program is an economic development tool for local communities to
partner with the State of Texas to promote job creation and capital investment in economically
distressed areas of the State. An enterprise project is defined as a business that is nominated by
a municipality or county and then approved for state benefits. Designated projects are eligible to
apply for state sales and use tax refunds on qualified expenditures. The level and amount of
refund is related to the capital investment and jobs created at the qualified business site.
Smith & Nephew qualifies for a single Enterprise Project Designation with a projected capital
investment of $25.7 million for the expansion of its operations at the existing medical
manufacturing facility at 4900 W. Vickery Boulevard. The investment includes $4.7 million to be
spent on real property improvements, and $21 million to be spent on machinery and equipment
for increased manufacturing capacity. The company will retain 83 employees and create an
additional 100 full-time jobs, with an average annual salary of$64,000.
The single project designation allows for a state sales and use tax refund on qualified
expenditures of $2,500 per job, for up to 500 jobs, with a maximum benefit of $1.25 million over a
five year period. Under the Texas Enterprise Zone Act at least twenty-five percent of the
business' new or retained employees will be residents of an enterprise zone, economically
disadvantaged individuals, or veterans. In addition, the jobs will be provided through the end of
the designation period or at least three years after the date on which a state benefit is received,
whichever is later.
On June 20, 2017, the City Council approved a 5 year tax abatement with Smith & Nephew and
Staff also recommended nominating Smith & Nephew, Inc. as an Enterprise Zone Project
pursuant to the Texas Enterprise Zone Program. Staff will place an M&C to this effect for
Council's consideration on the August 15, 2017 agenda. Submittal and approval of this
application for State benefits will have no fiscal impact to the City's general fund.
If you have any questions concerning this information, please contact Robert Sturns, Economic
Development Director at 817-212-2663 or robert.sturns@fortworthtexas.gov.
David Cooke
City Manager
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS