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INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 10248
March 19,2019
To the Mayor and Members of the City Council
Page 1 of 2
SUBJECT: AUTHORIZE AMENDMENT NO. 1 TO ECONOMIC DEVELOPMENT
PROGRAM WITH PARKER-HANNIFIN CORPORATION TO EXTEND
THE COMPLETION DEADLINE
On October 25, 2016 (M&C C-27976) the City Council authorized the execution of an Economic
Development Program Agreement (City Secretary Contract No. 52016) with Parker-Hannifin Corporation
(Company) for the consolidation of its existing business operation into a 242,000 square foot expansion at
4701 Mercantile Drive to support increasing business needs. Under the Agreement, the Company must
invest at least $25.5 million in real and business personal property improvements (exclusive of land costs)
and have at least 525 full-time equivalent jobs filled on the property by a date certain (defined as the
Completion Deadline). In return, as authorized by Chapter 380, Texas Local Government Code, the City
will pay Company 10 annual economic development program grants in an amount not to exceed 60 percent
of incremental real and personal property taxes.
Due to delays in finalizing development plans upon conducting an environmental assessment on the site,
the construction schedule had to be pushed out. In order to fulfill the commitments of the Agreement, the
Company had requested a revised completion deadline of March 31, 2019. On December 12, 2017, the
City Council authorized an amendment to extend the completion deadline from December 31, 2018 to
March 31, 2019 (M&C C-28501).
The company has currently expended approximately $12.0 M on the demolition and renovation portion of
the project, but the expansion project has moved slower than anticipated due to strong customer demand
and the need for company resources to be focused on meeting the demand. It is anticipated that the
renovations will be completed later this year and that the construction of the office facility will begin
shortly thereafter with an estimated completion in 2021. As such, the company has requested an additional
extension of the completion deadline from March 31, 2019 to December 31, 2021. The adjustment of the
completion deadline would also extend the deadline for having New Taxable Tangible Personal Property
valued at least Three Million Eight Hundred Thousand Dollars ($3,800,000.00) to January 1, 2022. The
current deadline is January 1, 2020.
All other terms and conditions outlined out in the Agreement will remain the same. The Company will
spend or cause to be expended the greater of 20 percent or $4,340,000.00 of all hard construction costs with
Fort Worth companies, and will spend or cause to be expended the greater of 15 percent or $3,255,000.00
of all hard construction costs with companies that are Fort Worth Certified Minority/Women Owned
Business Enterprise companies. The Company will fill a minimum of 40 percent of all FTEs with Fort
Worth residents and a minimum of 20 percent of all FTEs with Fort Worth Central City residents.
The Company will also spend the greater of 35 percent or $1,400,000.00 in annual discretionary service
and supply expenses with Fort Worth companies and the greater of 20 percent or $800,000.00 in annual
discretionary service and supply expenses with companies that are Fort Worth Certified Minority/Women
Owned Business Enterprise companies. The maximum annual program grant will be equal to 60 percent of
the incremental value of real and business personal property taxes on the development.
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 10248
March 19,2019
To the Mayor and Members of the City Council
Page 2 of 2
SUBJECT: AUTHORIZE AMENDMENT NO. 1 TO ECONOMIC DEVELOPMENT
PROGRAM WITH PARKER-HANNIFIN CORPORATION TO EXTEND
THE COMPLETION DEADLINE
Staff has no objection to this request because Parker-Hannifin is a Fortune 250 global leader in motion and
which is underway, consolidates two Fort Worth business operations into a world-class divisional
headquarters facility. The project involves the renovation of 150,000 SF of former call center into
manufacturing space, which provides for higher value jobs, and includes the construction of 92,400 SF
office addition.
While the delayed investment delays the impact for the City of Fort Worth, in general, the company will
end up paying taxes on the renovated manufacturing space without getting any of their incentive payment
until the entire project is completed. At that time, the City will also be benefiting from the entire
investment.
Staff will place an M&C for City Council consideration on the March 26, 2019 agenda, requesting that the
completion deadline be revised to December 31, 2021 and that New Taxable Tangible Personal Property
having a value of at least Three Million Eight Hundred Thousand Dollars ($3,800,000.00) must be in place
on the Development Site by January 1, 2022.
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