HomeMy WebLinkAboutResolution 5792-09-2023A Resolution
NO. 5792-09-2023
NOMINATING SIEMENS INDUSTRY INC. AT 7200 HARRIS LEGACY DRIVE
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 Siemens Industry 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 veterans; and
WHEREAS, pursuant to Chapter 2303, Subchapter F of the Texas Enterprise Zone Act, Texas Government Code
(the "Act"), Siemens Industry Inc. has applied to the City for designation as an enterprise project; and
WHEREAS, the City finds Siemens Industry Inc. meets the criteria for designation as an enterprise project under
Chapter 2303, Subchapter F of the Act on the following grounds:
1. Siemens Industry 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 outside of an enterprise zone, and at least thirty-five percent (35%) 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 Siemens Industry 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 Siemens Industry Inc. meets the criteria for tax relief and other incentives adopted
by the City and nominates Siemens Industry 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 Siemens Industry 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 Siemens Industry 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 121h day of September 2023.
ATEST:
By?-- ?
Jannette S. Goodall, City Secretary
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FORT WORTH:
Tax Abatement Reinvestment Zone No. 106
7200 Harris Legacy Dr Fort Worth TX 76140
"Exhibit A"
Copyright 2023 City of Fort Worth. Unauthorized reproduction is a violation of applicable laws. This product is for informational 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 appropriate relative
location of property boundaries. The City of Fort Worth assumes no responsibility for the accuracy of said data.
City of Fort Worth, Texas
Mayor and Council Communication
DATE: 09/12/23 M&C FILE NUMBER: M&C 23-0708
LOG NAME: 17SIEMENSTA
SUBJECT
(CD 8) Authorize Execution of a Ten -Year Tax Abatement Agreement with Siemens Industry Inc., or Affiliate, and Carter Park East Phase 1, LLC for
the Development of a Minimum 540,000 Square Foot Manufacturing Facility Having a Cost of at Least $125 Million, Located at 7200 Harris
Legacy Drive in Tax Abatement Reinvestment Zone No. 106, City of Fort Worth, Texas and Adopt the Attached Resolution Nominating this Project
as an Enterprise Project Persuant to Chapter 2303, Texas Government Code
RECOMMENDATION:
It is recommended that the City Council:
1. Authorize the execution of a ten-year tax abatement agreement with Siemens Industry Inc., or affiliate, and Carter Park East Phase I, LLC for
the development of a minimum 540,000 square foot manufacturing facility having a cost of at least $125 million, located at 7200 Harris
Legacy Drive in Tax Abatement Reinvestment Zone No. 106, City of Fort Worth, Texas;
2. Find that the terms of, and the property subject to, the Tax Abatement Agreement meet the criteria and guidelines set forth in the City of Fort
Worth's General Tax Abatement Policy (Resolution No. 5709-02-2023); 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:
Siemens Industry Inc. (Siemens), a subsidiary of Siemens AG, is a multinational, German corporation that is the largest industrial manufacturing
company in Europe, with operations in more than 190 countries worldwide. Siemens provides products, systems, and services for industrial
automation, drives, motors and energy management systems. Siemens has a presence today in Grand Prairie, Texas, and is looking to expand in
the region with a second facility for the production of low voltage switchgear and switch boards.
After a competitive site selection process, Siemens selected a site at 7200 Hams Legacy Drive to establish an advanced manufacturing plant
(Project Site). The site is owned by Carter Park East Phase 1, LLC (Carter Park East) and includes a building measuring a minimum of 540,000
square feet. Pursuant to a lease with Carter Park East, Siemens, and its affiliates, will be responsible for the design and construction of the
improvements for the project.
In order to facilitate the establishment of Siemens's manufacturing operation, the City proposes to enter into a tax abatement agreement with
Siemens and Carter Park East. The tax abatement will be tied to the amount of investment made by Siemens and satisfaction of other project and
spending requirements, as follows:
Investment:
1. Siemens must expend a minimum of $70,000,000.00 in total construction costs at the Project Site on or before December 31, 2024;
2. Siemens must install $55 million in taxable business personal property (BPP) that is new to the City at the Project Site having a minimum
taxable appraised value of $45,000,000.00 by January 1, 2025; and Siemens will be required to spend at least 15 percent of hard and soft
construction costs with contractors that are Business Equity Firms. Failure to meet this requirement will result in a reduction of the grant by
10 percent.
Siemens must provide a minimum of 167 full-time jobs on the Project Site on or before December 31, 2024, and a minimum of 715 on the Project
Site by December 31, 2026 and maintain that level for the duration of the agreement, with an average salary of at least $63,000.00
City Commitments:
1. The City will enter into a Tax Abatement Agreement with Siemens for a term of ten years.
2. The amount of City real property and BPP taxes to be abated in a given year will be equal to up to seventy percent (70%).
TABLE - Maximum Potential Abatement with Corresponding Components:
Property Owner or Company Commitment I Potential
Commitment: Real and Business Personal 1 40%
BEF Commitments (15% of Total Construction Costs)
10%
Annual Commitments:
Average Annual Salary > $63,000
10%
Overall Employment — 167 for years 2024-2025 and
715 for years 2026-2033 (as applicable)
10%
TOTAL
70%
Resolution Nominating this Project as an Enterprise Project
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 Siemens Industry Inc. 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.
If designated as an enterprise project by the State of Texas, Siemens commits to hiring thirty five percent (35%) economically disadvantaged
persons or enterprise zone residents for its certified jobs at its Fort Worth facility during its enterprise project designation.
Siemens qualifies for a single Enterprise Project Designation. The single project designation allows for a state sales and use tax refund on
qualified expenditures of $5,000.00 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.
The project is located in COUNCIL DISTRICT 8.
A Form 1295 is not required because: This contract will be with a publicly -traded business entity or a wholly -owned subsidiary of a publicly -traded
business entity: Siemens AG
FISCAL INFORMATION / CERTIFICATION:
The Director of Finance certifies that upon final approval of the Tax Abatement Agreement, this agreement will have no material effect on the Fiscal
Year 2023 Budget and an estimated $8,117,451.00 in new incremental property tax revenue will be reduced by $5,682,215.00, resulting in the
collection of $2,435,35.00 in net new incremental property tax revenue of over the next ten-year period. This impact to revenue will be incorporated
into the long-term financial forecast upon the Tax Abatement being officially granted.
Submitted for City Manager's Office-W. William Johnson 5806
Originating Business Unit Head: Robert Sturns 2663
Additional Information Contact: Cherie Gordon 6053