HomeMy WebLinkAboutIR 10189 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 10189
To the Mayor and Members of the City Council October 23, 2018
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SUBJECT: TEXAS ENTERPRISE ZONE NOMINATION FOR MERCEDES-BENZ
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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 Mercedes-Benz Financial Services USA
LLC (Mercedes-Benz Financial) 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.
Mercedes-Benz Financial qualifies for a single Enterprise Project Designation with a projected
capital investment of $50 million for the relocation of its operations to new construction at 14372
Heritage Parkway. The investment includes $3 million to be spent on land acquisition, $28 million
to be spent on building construction and $19 million to be spent on office and technical equipment
for increased financial services capacity. The company will retain 500 employees with an average
annual salary of$70,000.
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.
Staff will place an M&C for City Council consideration on the November 13, 2018 agenda
nominating Mercedes-Benz Financial as an Enterprise Zone Project pursuant to the Texas
Enterprise Zone Program. 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 817-392-2663 or robert.sturns@fortworthtexas.gov.
David Cooke
City Manager
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS