HomeMy WebLinkAboutResolution 5062-02-2019A Resolution
NO. 5062-02-2019
NOMINATING THE BEN E. KEITH COMPANY, INC. FACILITY
AT 7650 WILL ROGERS BOULEVARD
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 Ben E. Keith 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"), Ben E. Keith Company, Inc. has applied to the City for designation as an
enterprise project; and
WHEREAS, the City finds Ben E. Keith Company, Inc., meets the criteria for designation as an enterprise
project under Chapter 2303, Subchapter F of the Act on the following grounds:
1. Ben E. Keith 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
ORT WO TR�iI
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3. The designation of Ben E. Keith 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
WHEREAS, the City finds that Ben E. Keith Company, Inc., meets the criteria for tax relief and other
incentives adopted by the City and nominates Ben E. Keith 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 Ben E. Keith 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 Ben E. Keith 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 12'' day of February 2019.
ATTEST: A.
By:
Mar J. Kayser, yi S cret
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City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 2/12/2019 - Resolution No. 6062-02-2019
DATE: Tuesday, February 12, 2019
LOG NAME: 17TABENEKEITH
REFERENCE NO.: C-29042
SUBJECT:
Authorize Execution of a Tax Abatement Agreement with Ben E. Keith Company or an Affiliate for an
Expansion of its Food Distribution Operations on Property Located at 7650 Will Rogers Boulevard 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 a Tax Abatement Agreement with Ben E. Keith Company or an
affiliate for an expansion of its food distribution operations on property located at 7650 Will Rogers
Boulevard;
2. 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:
Ben E. Keith Company, or an affiliate (Company) intends to construct an approximate 185,000 square foot
expansion of office and warehouse facilities to support expanded operations at its existing food distribution
facility located at 7650 Will Rogers Boulevard in Carter Industrial Park. The proposed expansion would
involve a minimum investment of $22 million in total construction costs and would lead to the hiring of at
least 283 net new jobs at the facility.
Tax Abatement Agreement
In order to facilitate this development, the City of Fort Worth (City) proposes to enter into a 7 -year Tax
Abatement Agreement, as authorized by Chapter 312, Texas Local Government Code. The percentage of
the tax abatement will be tied to the amount of investment made by the Company and satisfaction of other
project and spending requirements, as follows:
Investment:
Minimum investment of $22 million in total construction costs (exclusive of land acquisition costs) by no
later than January 1, 2022, a minimum $20 million of which is required to be hard construction costs. The
development shall consist of approximately 185,000 square feet of new office and warehouse space at the
property. All improvements must have a temporary or final certificate of occupancy by June 30, 2021.
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 Company must employ a minimum 855 full-time jobs at the property for the duration of the
Logname: 17TABENEKEITH Page 1 of 4
agreement. Additionally, Company must add a minimum 179 net new full-time employees to be based out
of the project site by no later than December 31, 2023 and must add a minimum 283 net new jobs
(inclusive of the 179 previously added) by no later than December 31, 2025. All 283 new full-time
employees added to the project site must have an average annual wage of $73,000 (not including
benefits). Of the 179 new full-time employees added to the project site by December 31, 2023, a minimum
of 46 must be Fort Worth residents and a minimum 12 must be Fort Worth Central City Residents. Of the
283 new full-time employees added to the project site by December 31, 2025, a minimum of 85 must be
Fort Worth residents and a minimum 21 must be 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 (Construction):
The Company must spend a minimum of $3 million of all Hard Construction Costs with contractors that are
Fort Worth companies. Company must spend a minimum of 10% of total construction costs — both hard
and soft — with qualified M/WBE businesses. Failure to meet the MNVBE commitment will result in a
reduction of 10% of the eligible incentive.
Utilization of Fort Worth Companies (Supply & Services):
The Company must spend a minimum of $900,000.00 of annual discretionary supply and service
expenditures 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 provide a tax abatement for a period of seven years. The maximum taxes to be abated
annually will equal up to 50 percent of the incremental real and business personal property taxes collected
by the City of Fort Worth in each tax 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 abatement 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 Abatement with Corresponding Components:
Logname: 17TABENEKEITH Page 2 of 4
Potential
Potential
Abatement
Property Owner or Company Commitment
Abatement
(Year 1 and
(Year 3
2)
and
beyond)
otal Construction Cost Investment —
�20%
5%
_
Minimum of $3 million of Construction Spending with FW
o
5 /0
_
o
2.5/o
Contractors
Construction Spending with FW Certified M/WBE
Contractors
10%
10%
Creation of new jobs in accordance with Section Il.a.
110%
16%
[Creation of new jobs in accordance with Section Il.b.
0%
15%
Logname: 17TABENEKEITH Page 2 of 4
Full Time Employees hired are Fort Worth Residents in
accordance with Section Il.c.
0%
2.5%
Full Time Employees hired are Fort Worth Central City
Residents in accordance with Section Il.d.
0%
2.5%
Budget
Reference #
moun
nnually spend the amount in Section Il.e. with FW
5%
2.5%
Companies for Services and Supplies
1
`TOTAL
50%
�00/0
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 Company 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.
Company 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 tax abatement provided under this agreement will
be built into the City's long-term financial forecast for Business Personal Property Tax with a maximum
estimated abatement of $877,392.00.
FUND IDENTIFIERS (FIDS):
TO
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Department
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Program
ctivity
Budget
Reference #
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ID
1 ID
1
Year
(Chartfield 2)
FROM
Fund
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Budget
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CERTIFICATIONS:
Logname: 17TABENEKEITH Page 3 of 4
Originating Department Head:
Additional Information Contact:
Susan Alanis (8180)
Robert Sturns (2663)
Michael Hennig (6024)
Logname: 17TABENEKEITH Page 4 of 4