HomeMy WebLinkAboutResolution 4999-10-2018 A Resolution
NO. 4999-10-2018
NOMINATING THE MCLANE COMPANY, INC. FACILITY
AT 7550 OAK GROVE ROAD
AS AN ENTERPRISE PROJECT PURSUANT TO
THE TEXAS ENTERPRISE ZONE ACT,
CHAPTER 2303, TEXAS GOVERNMENT CODE
WHEREAS, on November 4, 2003 the City Council of the City of Fort Worth (the "City") previously adopted
Ordinance No. 15733 electing to participate in the Texas Enterprise Zone Program; and
WHEREAS, on May 12, 2015 the City Council of the City 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;and the local incentives available pursuant to this Resolution
are the same on this date as were outlined in Ordinance No. 21743-05-2015; and
WHEREAS, the Office of the Governor, Economic Development and Tourism (EDC), through the Economic
Development Bank ("Bank"), will consider McLane Company, Inc., as an enterprise project pursuant to a
nomination and an application made by the City; and
WHEREAS, the City desires to pursue the creation of the proper economic and social environment in order to
induce the investment of private resources in productive business enterprises located in the City and to provide
employment to residents of enterprise zones and to other economically disadvantaged individuals;and
WHEREAS,pursuant to Chapter 2303, Subchapter F of the Texas Enterprise Zone Act, Texas Government Code
(the"Act"),McLane Company, Inc.has applied to the City for designation as an enterprise project;and
WHEREAS, the City finds that the McLane Company, Inc. in the City meets the criteria for designation as an
enterprise project under Chapter 2303, Subchapter F of the Act on the following grounds:
1. McLane Company, Inc., is a"qualified business"under Section 2303.402 of the Act since it will be
engaged in the active conduct of a trade or business at a qualified business site within the governing body's
jurisdiction located within an enterprise zone,and at least twenty-five percent(25%)of the business's new
or retained employees will be residents of an enterprise zone, economically disadvantaged individuals or
veterans;and
2. There has been and will continue to be a high level of cooperation between public, private, and
neighborhood entities within the area; and
3. The designation of McLane Company,Inc.as an enterprise project will contribute significantly to the
achievement of the plans of the City for development and revitalization of the area; and
Resolution No.4999-10-2018
WHEREAS,the City finds that McLane Company,Inc.meets the criteria for tax relief and other incentives adopted
by the City and nominates McLane Company, Inc. for enterprise project status on the grounds that it is located at
the qualified business site and will create a higher level of employment, economic activity and stability in the area;
and
WHEREAS, the City finds that it is in the best interest of the City to nominate McLane Company, Inc. as an
enterprise project pursuant to the Act;
NOW,THEREFORE,BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH,
TEXAS:
1. THAT the findings of the City and its actions approving this Resolution taken at the Council
meeting are hereby approved and adopted.
2. THAT McLane Company, Inc. is a"qualified business,"as defined in Section 2303.402 of the Act,
and meets the criteria for designation as an enterprise project, as set forth in Section 2303,
Subchapter F of the Act.
3. THAT the enterprise project shall take effect on the date of designation of the enterprise project
by the Bank and terminate five(5)years after the date of designation.
Adopted this 30t"day of October, 2018.
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FORTWORTH"', McLane Company, Inc.
7550 Oak Grove Road
Fort Worth, TX 76140
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Copyright 2019(Sty of Fort Worth.Unauthorized reproduction is a violation of applicable laws.This product is for informatioral purposes and may not have been prepared for or be
suitable for legal,engineering,or surveying purposes.It does not represent an on-the-ground survey and represents only the appro>omate relative location of property bwurdaries.The
City of fort Worth assumes no responsibility for the accuracy of said data.
City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 10/30/2018 - Resolution No. 4999-10-2018
DATE: Tuesday, October 30, 2018 REFERENCE NO.: C-28914
LOG NAME: 17EDMCLANE
SUBJECT:
Authorize Execution of an Economic Development Program Agreement with McLane Company, Inc., or an
Affiliate for the Development and Operation of a Wholesale Grocery Distribution Center on Property
Located at 7550 Oak Grove Road and Adopt Resolution Nominating this Project as an Enterprise Project
Pursuant to Chapter 2303, Texas Government Code (COUNCIL DISTRICT 8)
RECOMMENDATION:
It is recommended that the City Council:
1. Authorize the City Manager to execute an Economic Development Program Agreement with McLane
Company, Inc., or an affiliate for the development and operation of a wholesale grocery distribution center
on property located at 7550 Oak Grove Road;
2. Find that the terms and conditions of the Agreement, as outlined below, constitute a custom-designed
Economic Development Program, as recommended by the 2018 Comprehensive Plan and authorized by
Chapter 380 of the Texas Local Government Code; and
3. Adopt the attached Resolution nominating this project as an Enterprise Project, pursuant to the Texas
Enterprise Zone Act, Chapter 2303 of the Texas Government Code.
DISCUSSION:
McLane Company, Inc., or an affiliate (Developer) intends to locate a 650,000 square foot regional
distribution center at 7550 Oak Grove Road for the wholesale distribution of grocery goods which will
result in the hiring of at least 550 full-time equivalent employees. Total investment will consist of the
acquisition and installation of at least $18 million in business personal property by January 1, 2020.
Economic Development Program Agreement
In order to facilitate this development, the City of Fort Worth (City) proposes to provide 5 annual Economic
Development Program grants to the Developer, as authorized by Chapter 380, Texas Local Government
Code. The grants will be tied to the amount of investment made by the Developer and satisfaction of
other project and spending requirements, as follows:
Investment:
- Minimum investment of$18 million in new business personal property must be made by January 1, 2020
as a result of the move to a 650,000 square foot leased commercial facility. The value of business
personal property will be as appraised by the Tarrant Appraisal District.
Logname: 17EDMCLANE Page 1 of 3
Failure to meet the following criteria is an event of default, which subject to commercially reasonable
notice and cure rights, will result in immediate termination of the Agreement.
Employment Commitments:'
The Developer must employ a minimum of 550 full-time employees on the property by December 1,
2020. The Developer must fill the greater of 165 full time positions or 30 percent of all full time positions
with Fort Worth residents and the greater of 55 full time positions or 10 percent of all full time positions
with Fort Worth Central City residents (with the understanding that employment of Fort Worth Central City
residents will also count as employment of Fort Worth residents).
Utilization of Fort Worth Companies and Fort Worth Certified M/WBE Companies (Supply &
Services):
The Developer must spend a minimum of$60,000.00 of annual discretionary service and supply
expenditures with Fort Worth companies, and a minimum of$30,000.00 of annual discretionary service
and supply expenditures with Fort Worth certified M/WBE companies (with the understanding that dollars
spent with Fort Worth certified M/WBE companies will also count as dollars spent with Fort Worth
companies.)
Supply and Service Expenditures means all expenditures by the company expended directly for the
operation and maintenance of the development, excluding amounts paid for electric, gas, water and any
other utility services (but not excluding cable, internet or television services).
City Commitments:
The City will make 5 annual Economic Development Program grants to the Developer, subject to the
following conditions. The maximum annual program grant will equal up to 50 percent of business personal
property taxes collected by the City of Fort Worth in the previous year. Except for cases of default, failure
to meet any of the commitments above will result.in a reduction of the corresponding component of the
grant for that year proportional to the amount the commitment was not met, or for the duration of the
Agreement in the case of construction commitments.
TABLE IV-1 Maximum Potential Grant with Corresponding Components:
F__ Property Owner or Company Commitment Potential Grant
ff otal Business Personal Property Investment of$18 million or greater 250/6
otal of 550 Full Time Employees housed annually at Fort Worth facility (� 13%
30%of the Annual Full Time Employees are Fort Worth Residents 3%
10%of the Annual Full Time Employees are Central City Fort Worth Residents 3%_
0%of Annual Service&Supplies Spending with Fort Worth Companies 3%
15%of Annual Service&Supplies Spending with FW Certified M/ BE's Contractors 3% _
OTAL 1 50%
Resolution Nominating this Project as an Enterprise Project
The City Council previously adopted 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 Developer 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
Logname: 17EDMCLANE Page 2 of 3
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.
Developer qualifies for a single Enterprise Project Designation. 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.
This project is located in COUNCIL DISTRICT 8.
FISCAL INFORMATION / CERTIFICATION:
The Director of Finance certifies that upon approval, the grants provided under this agreement will be built
into the City's long-term financial forecast for Business Personal Property Tax with a maximum estimated
grant award of$363,250.00.
FUND IDENTIFIERS (FIDs):
TO
Fund Department ccoun Project JProgram ctivity Budget Reference # moun
ID ID Year (Chartfield 2)
FROM
Fund Department ccoun Project JProgram ctivity Budget Reference # moun
ID ID Year (Chart field 2)
CERTIFICATIONS:
Submitted for City Manager's Office by: Robert Sturns (2663)
Originating Department Head: Robert Sturns (2663)
Additional Information Contact: Scott Connell (2608)
Logname: 17EDMCLANE Page 3 of 3