HomeMy WebLinkAboutResolution 5818-10-2023 A Resolution
NO. 5818-10-2023
NOMINATING YA YA FOODS USA LLC
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 Ya Ya Foods USA LLC 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"),Ya Ya Foods USA LLC has applied to the City for designation as an enterprise project; and
WHEREAS,the City finds Ya Ya Foods USA LLC meets the criteria for designation as an enterprise project under
Chapter 2303, Subchapter F of the Act on the following grounds:
1. Ya Ya Foods USA LLC 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 Ya Ya Foods USA LLC 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 Ya Ya Foods USA LLC meets the criteria for tax relief and other incentives adopted
by the City and nominates Ya Ya Foods USA LLC for enterprise project status on the grounds that it is located at
1
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 Ya Ya Foods USA LLC 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 Ya Ya Foods USA LLC 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 171 day of October 2023.
ATTEST:
By:
Jannette S. Goodall, City Secretary
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City of Fort Worth, Texas
Mayor and Council Communication
DATE: 10/17/23 M&C FILE NUMBER: M&C 23-0859
LOG NAME: 17YAYAFOODSTEZ
SUBJECT
(CD 8)Authorize the Execution of a Consent to Assignment of City of Secretary Contract No.57440,an Economic Development Program
Agreement,with Oatly US Operations&Supply, Inc.to Ya Ya Foods USA, LLC and Adopt Resolution Nominating Ya Ya Foods USA LLC's Facility
at 7550 Oak Grove Road as an Enterprise Project Pursuant to the Texas Enterprise Zone Act,Chapter 2303 of the Texas Government Code
RECOMMENDATION:
It is recommended that the City Council:
1 Authorize the execution of a Consent to Assignment of City of Secretary Contract No.57440,an Economic Development Program Agreement,
with Oatly US Operations&Supply,Inc.to Ya Ya Foods USA,LLC;and
2. Adopt the attached resolution nominating Ya Ya Foods USA,LLC's facility at 7550 Oak Grove Road as an enterprise project pursuant to the
Texas Enterprise Zone Act,Chapter 2303 of the Texas Government Code.
DISCUSSION:
The City of Fort Worth(City)entered into an Economic Development Program Agreement(EDPA)with Oatly US Operations&Supply Inc. (Oatly)
(CSO 57440)as authorized by the City Council on January 26,2021 (M&C 21-0071).As part of the EDPA,Oatly agreed to several commitments,
including spending a minimum$36 million in total construction costs by December 31,2024 for a new facility located at 7550 Oak Grove Road,
locating business personal property at the project site that is appraised at a minimum of$48 million in taxable value,and providing for a minimum
50 full-time jobs with an average annual salary of$46,325.In return,the City agreed to provide up to five annual Economic Development Program
grants(Grants)equal to up to 40 percent of the City's incremental ad valorem tax revenue from the project site.
Since that time,Oatly has entered into a service agreement with Ya Ya Foods USA LLC(Ya Ya)who will be responsible for completing all
remaining project work,operating the facility,and who will produce the alternative dairy products on Oatly's behalf.Oatly,therefore,wishes to
assign the EDPA to Ya Ya,which would bind Ya Ya to all existing company commitments under the EDPA.
Separately,the City nominated Oatly as an enterprise project under the Texas Enterprise Zone Program. Nominations under that program cannot
be assigned.Therefore,Ya Ya Foods is seeking a nomination at this time in order to be eligible for benefits under the program.
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 Ya Ya 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,Ya Ya commits to hiring thirty-five percent(35%)economically disadvantaged persons
or enterprise zone residents for its new permanent jobs at its Fort Worth facility during its enterprise project designation.Ya Ya expects to retain all
full-time jobs for benefit under the Enterprise Zone Program.
The single project designation allows for a state sales and use tax refund on qualified expenditures of$2,500.00 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 thirty-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 M&C does not request approval of a contract with a business entity.
FISCAL INFORMATION/CERTIFICATION:
The Director of Finance certifies that approval of this recommendation will have no material effect on City funds.
Submitted for City Manager's Office bX; William Johnson 5806
Originating Business Unit Head: Robert Sturns 2663
Additional Information Contact: Michael Hennig 6024