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Home My WebLink AboutIR 8342 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 8342 Date: July 24, tool To the Mayor and Members of the City Council Page 1 f SUBJECT: Tax Abatement Agreement for Motheral Printing Company Purpose This Informal Report presents an overview of the Tax Abatement application submitted by Motheral Printing Company which will be presented in Pre-Council on July 24, 2001. Council action on this item is scheduled for July 31, 2001. Background Motheral Printing Company, a third generation Fort Worth company, is the largest printing company in Tarrant County. This printing business has been in Fort Worth since 1934 and at their current location since 1956. The company is relocating from 510 S. Main due to a recent agreement with the Fort Worth ISD. The school district had development plans for the site and had planned condemnation to acquire the property occupied by Motheral, however an agreement was reached to sell the property. The site under consideration for relocation is located in Southeast Fort Worth on Campus Dr. and is in the South Enterprise Zone and the "Central City". Motheral submitted an application for tax abatement in April 2001. Their request was reviewed by the Economic Development Committee and it was recommended that the proposed agreement be brought before the full council for consideration. Motheral Printing is requesting consideration of the tax abatement request to help offset the substantial costs associated with the relocation, and to provide for them to remain in Fort Worth. Proiect Information .Motheral Printing Company has submitted an application for tax abatement to the City's Economic Development Office (Exhibit A). The tax abatement would apply to personal property and to real property that Motheral will purchase and locate in Southeast Fort Worth. The 22 acres will serve as company headquarters and contain a 168,000 square foot printing facility. Motheral is proposing to investment $29.5 million dollars in real and personal property at the new site. The new facility will retain Motheral in the Central City and 255 full-time jobs. Wages for these positions average $12.83 per hour and have full benefits. Of the 255 current employees, 111 are Fort Worth residents and 77 are Central City residents. Abatement Structure The abatement structure will provide Motheral Printing Company with the opportunity to receive specified percentages for performance in the areas of construction contracting, supply & service sp ding, and employment. This structure is more fully described in Exhibit B. rl\Gary W. Jackson City Manager ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS Exhibit A 01' Cm OF FORT WORTH APPLICATION FOR COMMERaALIINDUSTRIAL TAX ABATEMENT MOTHERAL PRINTING COMPANY r CITY OF FORT WORTH Irv , APPLICATION FOR COMMERCIAL/INDUSTRIAL TAX ABATEMENT 1. Applicant Information: Name,: F.L. Motheral Co. dba Motheral Printing Company Address: 510 South Main Street City, State Zip Code: Fort Worth, Texas 76104 Telephone: 817-335-1481 ext. 226 Fax: 817-429-6165 Internet E-mail Address (if available): jmotheral@motheral.COM Contact Person (include title/position): Jim Motheral, President Name of property owner: Motheral Printing Company 2. Property Description: Attach legal description or surveyor's metes & bounds description: (maps attached) A) 5200 Campus Drive 3. Current Appraised Value of Property: Attach latest copy of property tax statement from the County Appraisal District. Attached 4. Attach a brief description of the project including: services provided or products manufactured, major customers and locations, etc. Motheral Printing is a 3rd generation family owned printing business that began in February 1934 in Fort Worth. We have been in our second location at 510 South Main since 1956. 85% of our business is produced on heat-set web presses. Our target market is national in scope, consisting primarily of catalogs, publications and direct mail. We are Fort Worth's Post Office largest publication customer. As we gain printing capacity, the majority of our growth will come from out-of-state. We are currently the 198th largest printer in the U5. 5. Project Description: A) New Facilities 1) Size: 168,000 sq. ft 2) Cost of construction: $9-12 mm 8) Site Development (parking, fencing, landscaping, etc.): 1) Type of work to be done: Site prep, parking, fencing, landscaping 2) Projected costs: $1mm (part of the $9-12 mm in A)2 above) C) Personal Property: 1) Value of: (a) Inventory: � $790,680 currently, $1,500,000 when moved (b) Supplies: 2) Percent of inventory eligible or f reeport exemption (inventory exported from Texas within 175 days) 49% 3) Value of equipment, machinery, furnishings, etc.: $20,500,000 $6,000,000 Now 6. Project Construction: A) What percent of the construction costs (5A. & B. above) will you commit to spend with: 1) Fort Worth businesses? 40% 2) Minority and Women owned Business Enterprises? 5% B) When will construction start? Jan 1, 2002 end? Sept 12002 C) How many construction jobs will be created? 25-35, Potential 150-250 workers D) What is the estimated payroll for these jobs? $24-30,000 per year 7. Employment A) Is this project an expansion or modernization of an existing facility? If so, please answer the following: 1) How many persons are currently employed? 255 2) What percent of 1. above are: (a) Fort worth residents? 44% 111 (b) Inner City residents? 30% 77 Y. Page 2 B) Please complete the following table. Project Start Fifth Year Tenth Year New jobs to be created 20 50 130 Less transfers* (retention) 255 0 0 Net jobs 275 325 455 % of net jobs to be filled by 5ee Agreement Fort Worth residents** % of net jobs to be filled by 5ee Agreement Inner City residents * If any employees will be transferring, please describe from where they will be transferring. ** Must be at least 25% C) Attach a description of the jobs to be created (technician, engineer, machinist, etc.), task(s) to be performed by each, and wage rate for each classification. D) Attach a brief description of the employee benefit package(s) offered (i.e. Health insurance, retirement, public transportation assistance, day care providision, etc.) including portion paid by employee and employer respectively. Attached 8. Regarding supply and service expenses (i.e. landscaping, office or manufacturing supplies, janitorial services, etc.): A) What is the annual amount of non-sole source supply and service expenses? Supplies & Services - $400,000.00 B) What percentage of 8A. will be committed to Fort Worth businesses? 5upplies & Services - 25% C) What percentage of 8A. will be committed to Minority and Women owned businesses? Supplies & Services - 15% 9. Is the property appropriately zoned for this project? No, need J Light Industrial 10. Is the property platted? If yes, will replotting be necessary? Yes, Site A 11. Attach a description of any environmental impacts associated with this project. None J Page 3 12. Attach a description of any direct benefits to the City of Fort Worth as a result of this project (i.e. Sales tax, inventory tax, development fees, etc.) Current Texas Sale-s..$17,700,000 Larger employment base 51h year..........................$24,000,000 loth year........................$30,000,000 13. Do you intend to pursue abatement of: County taxes - YES School taxes - NO 14. What level of abatement do you request: Years?- 10 Percentage? 100% 15. On an attachment, explain why tax abatement is necessary for the success of this project. Include a business pro forma or other documentation to substantiate your request. Attached On behalf of the applicant, I certify the information contained in this application (including all attachments) to be true and correct. I further certify that, on behalf of the applicant, I have read the "Policy Statement: Tax Abatement for Qualified Development Projects" and agree to comply with the guidelines and criteria stated therein. Ji0CMotheral President Page 4 CITY OF FORT WORTH APPLICATION FOR COMMERCIAL/INDUSTRIAL TAX ABATEMENT ATTACHMENT #2 PROPERTY DESCRIPTION FILE Na. FN74752 lid` Page i of 1 FIELD NMZSx Being 22 .595 Acres of land in the Elijah Rogers Survey, Abstract Numb 1292, Tarrant County, Texas, and being also a part of that cer- tain 52.501 Acres of land described in Trusteef s Deed from Norma Lea Beasley to Donald M. White, dated May 1, 1979, recorded in Volume 6731, Page 245, of the Tarrant County Deed Records, being more par- ticularly described by metes and bounds as follows: CflNKMCIM6 at a concrete monument marking the southeast corner of a State of Texas Tract, known as the "Resource Centre office Park" described in deed recorded in Volume 5412, Page 900, of the Tarrant County Deed Records; T3[ZMC3 F. 00008100"E. 35. 00 feet along the east line of said "Resource Centre office Park" to the PLACE GF BEG22MING;, TBENCE X. 0000$ 100"E. 850. 00 feet along the east line of said "Resource Centre office Park"; TZENCE S.89052100"E. 900.00 feet to the west lane of Campus Boulevard (120' right of. sway) ; TX=CE S.31006130 11E. 993.40 feet along the west line of Campus Boulevard to the north line of a 30-fact City of Fort Worth water line F easement; THENCE N.990551 00"W. 1416.00 feet along the north line of said 30--foot City of Fort Worth water line easement to the PLACE OF BEGrN- N12tta. �3 C cli ti -A w n G '!r LO .4 r CPM � � "`'h te rl aA A 7o' Owl i i i �J CITY OF FORT WORTH APPLICATION FOR COMMERCIAL/INDUSTRIAL TAX ABATEMENT ATTACHMENT #3 CURRENT APPRAISED VALUE roll TxuNe WSA: Tarrant County Property Information TAD Nuxuber:053M17 P'IDH:A1292 2A02 chwoct'a NMW D&K FAMIL Y ef Addtoea lflU TX 77339-2539 Lomtkm _�j 00 CAMPM Legal OGI:RS,ELUAH SURVEY 292 TR 2A02 School I ott Waettb Ind(905) city an Woft(026) SFaai IlRstricts This information is intended for reference only and is subject to cbaagr—It may not accurately reflect rbe conviete status of the account as acttuaft carried in Tarrsat Appraisal District'x database and may not be used as s basis of prows or appeal. PROPERTY � PROPERTY WORMATION VALUES Tax Yeas eerfirwd Valnd '99 certifies!S Uttita 0 SQFT! pp wd Buiktiag Value Sol so dances 27.10 1 Laad Value $540,.'S3$I 5590.2381 LoxA Squm Feet 1,180,47 61 Value= $590,2381 S590,238I ear ands 01 Mmixt Bw1cling value Sol Pool t Lava value 5$90,2381 91RI Mmkot Value $590,238 TAD Map 1-P61)=`4 class t uT;11 E=wp0ow :rc Starve Code D-, t Change 99 to 2000 0.00 No.ofBedromw 01 1 No.oFBaduooms 0 oyes Date 04142000 Nm of Garap at Bays 0 Ping N Air 1]ata 1!1211946 Docd Volume 001=71 Dmd?age W016-651 U Coda Nmnber 80463312 I tnformadoa UM 9 at as of 13/14/2000 FTR�Ag-WN=.au Agcut Cads 000320 Ei-on-'E&TCWCFiE LLF' I 1 ' �:'F' t:.t"r.•. � is i4�:)ia'. :a: :1:. .. . .: ... ki.... .SL.tt, ii::.. 'Iie:: ...•..�� . U. :r"..__ .. Note:l3oddiug U=tm taay isma wt more than ow-coast eoutaiaed in a t iaglc E.Mom=Unit(ECU). 7 Value IrMMory 1 Tax Year Vki Valu cl V%LI oad Vaioel 1949 L SLOI 5590 $590,2381 15199 a;;��.�sol $s9oz#s! $59o,�s 194'7 Cadfsedi S0 &590..381 5590,238 19%C 501 5590,238 S59o,2381 T2XNetUSA: Tarrant County Property-Information TAD 14=nLber: 0U7M9 PIDN: A1638 2091 A Ownet's N•sose D A&FAMILY, — ara!dMsilittK �'•�nr7 V.�LI.£`t':�4�:t.Idf'�F'. I]K Address E TX 77339-253' Business Nataa Localke 101 :0—OP 826 - •v Lao WOODY,SAMUEL SM De!sr�ipligea 638 TRX01A Sc honl net Worth led(905) co _ at Worth(026) Speec* Districts This Information is intended for reference only and is subject to chane.It may not accuratdy reflect the txnttrStfNettt status of the account as asmaily carried in Tarrant Appraisal District's database and may not be used as a basis oi protest or appeaL PROPMTY _ PStoP11:RTY EYMWMATION VALUES I _ Tax Year 20w Cawed Valvei '99 Certified 5 Units 0 SQFr' Banding Va10c so S0) Ac=es 4j7 r L Lana Vattta SIZS,I9t $I2S,I911 Lmd Square Feet 208,6521 Value S1Z5,191' S125,19t� ear Bush 0 Maixt Bmdding Vie Sod Pact lxtLwd Value S125,191 MBPWO 92N 'Market Value 5125,191 AD Map 2^,Nit F+4 Shft Cc& C.1 Imocat Cbeage 99 to 2000 0.00 0f I3*iwms 0 .of Batt rooms 0 Nc6=Dane 041420001 of Garage Bays 0 ARB Pending N! Halt Air Date 1/12/1996 Weed Volume 0012237' Page 0001665 CU Caic Number 8046331: his informadon current as of 12I14/2ao6 ax Agent Cede 000320 ex Agent Name D=a:TOUCHE LLP Ndae:BnzleE g Ubits mALy spreseW merle thm me=oun2 wnftbwd in a ic*EcrmOmc U=t(ECVj- Valne Tax Year 1314 V sad V&L a!tad valoel 1999 40 5125,191 S125.I91 1998 C 501 $208,6521 5:08,65 1947 Ccrti6ed SO S208,652 $208,652 r 1996 C St1 8208.652 Ss08,652 Ta3Net USA: Warrant County Persona] Property Information Thu iaf up to ddirm as ofgnrx4o4. �0';,n TAD Aect Number:4A28XSAa Real Estate Acct. Number Orwnces Name F L MOTHERAL CO and Mailing PO BM 629 Addmss FORT WORTH TX 7610146291 Location 512 MAIN Hasi ato Nmw OTIMRAL PIi1 n NG Co =Code 59 slam CO& scho0i wit,iaa c4os� City at wort$(026) Sp-i,a Disbaft 99 000 'Ibis iAdornu ties is intended for reference only and Is subject to change_V may not accurately reflect the complete status of the account as actually carried in Tarrant Appraisal District's database and.may not be aced as a basis of prattst or appesL PROPERTY VALUES Tmc Yens 2084 rab9Re#''Sh0 199 Ca 198 Cerdtlwtl '97 CesrdMd TOW Valiuc $6,933,338.00 V+11nei Vnlcte) 58,353.664.04 $'7,514,018.001 58,226,89'7.00 atiec Daft 1 Zz000' %Cb=90 99 C=It to 2040 ARB X03 000690 axAscat Cade NEWTON ESTATE d=PR(W Tax z N TAXq A:10thkW ScitrCh_ St�Jrt:h 11J.1 h,.r z(IU411, 10 CITY OF FORT WORTH APPLICATION FOR COMMERCIAUINDUSTRIAL. TAX ABATEMENT ATTACHMENT 7C EMPLOYMENT SALARY RANGES Attachment 7C, Page 1 MOTHERAL PRINTING COMPANY r0l SALARY RANGES - MARCH 2001 Estimating Low High Estimating Manager $48,000,00 $55,000.00 Estimator $39,000,00 $47,000.00 Customer Service CSR Manager $44,000.00 $54.000.00 Customer Service Rep $32,000.00 $44,000.00 PrePress PrePress Manager $64,000.00 574,000.00 PrePress Supervisor $48,000.00 $64,000.00 Scanner Operator $18.30 $22.25 Mac Operators S18.85 $22.15 Proofer/Platemaker $14.70 $18.20 Pressroom Pressroom Manager $65,000.00 $75,000.00 Pressroom Supervisor $54,000,00 $65,000.00 I"Press Operator Web S18.25 $21.50 2'4 Press Operator Web S14.33 $16.35 Rolltender $9.50 S 11.00 Jogger $7.50 $8.00 1"Press Oper. Sheetfed $20.00 $22.50 2"Press Oper. Sheetfed 312.50 $15-920_� Feeder $8.00 $11.00 0 Bindery Binder Manager $54,000.00 $66,000.00 -Bindery Supervisor $34,000.00 $44,000.00 Cutter Operator $14.00 $15.50 Folder Operator $13.00 $15.75 Stitcher Operator $11.87 $16.90 Perfect Binder Operator $17.00 $17.00 Binder Helper $7.00 S8.00 Mailroom/Fulfillment ;Mailrooni Manager $40,000.00 $50,000.00 Mailroom Mach Oper. $11.00 $11.45 M Mailroom Helper $7.00 $8.00 Fulfillment Supervisor $9.00 $14.50 Fulfillment Helper $7,00 $8.00 Shivuin2 Traffic Manager $35,000.00 $48,000.00 Shipping Coordinator $9.50 $12.25 Shipper Clerk $9.00 $1238 Driver $9.50 $12.25 We allign our pay scale to the Printing & Imaging Association of Texas Wage & Benefit Survey. Attachment 7C, IPage 2 MOTHERAL PRINTING COMPANY JOB DESCRIPTIONS Job Title: Estimating Manager Basic Function: Overseeing the Estimate Deportment to price jobs based on information and specifications supplied by the Sales Department to provide competitive pricing estimates. Job Title: Estimator Basic Function: Pricing jobs based on information and specifications supplied by the Sales Department to provide competitive pricing estimates. Job Title: Scheduler/Customer Service Manager Basic Function: Scheduling work the most efficient way while meeting the customer's delivery requirements, supervising the CSR department. Job Title: Customer Service Representative Basic Function: Coordinating job production throughout each department and maintain constant contact with customer to keep them apprised of workflow. Job Title: Prep Manager Basic Function: Managing, developing, and improving all operations of the Conventional Pre-Press and the Digital Pre-Press Department. Job Title: Prep Supervisor Basic Function: Directing and monitoring all activities relating to Pre-press operations. Job Title: Scanner Operator Basic Function: Scanning customer's originals info a the Motheral digital system to match and/or improve customer's originals assuring all required customer specifications are met. Job Title: Desktop Trapping Basic Function: Producing layouts, artwork and page assemblies on electronic publishing systems and generating digital color proofs from electronic files as needed for production. Job Title: Proofer Basic Function; Preparing and inspecting proofs assuring a quality product is produced and free of defects. Job Title: Platemaker Basic Function: Preparing and inspecting plates assuring a quality product is produced and free of defects. Attachment 7C, Page 3 MOTHERAL PRINTING COMPANY JOB DESCRIPTIONS Job Title: Pressroom Manager Basic Function: Directing all activities related to the pressroom operating of the company Job Title. Pressroom Supervisor Basic Function: Overseeing production and personnel during the printing process Job Title: I' Press Operator (Web) Basic Function: Overseeing all elements of operating a web press and supervising press crew to insure a quality product is being produced at all times and in compliance with customer job specifications. Job Title: 2"d Press Operator (Web) Basic Function: Assisting 1'7 Press Operator in all elements of operating a web press throughout a job run and to insure a quality product is being produced and is in compliance with customer job specifications at all times. Job Title: Roil Tender (Web Press) Basic Function: Assuring that rolls of paper are running properly through the press continuously without interruption. Job Ti tle: Jogger (Web Press) Basic Function: Evaluating product coming off of press and assuring that product is properly put in designated containers. Job Title: 1'' Press Operator (5heetfed) Basic Function: Overseeing all elements of operating a sheetfed press and supervising press crew to insure a quality product is being produced at all times and in compliance with customer job specifications. Job Title: 2"d Press Operator (Sheetfed) Basic Function: Assisting 1't Press Operator in all elements of operating a sheetfed press throughout a job run and to insure a quality product is being produced and is in compliance with customer job specifications at all times. Job Title: Feeder (5heetfed) Basic Function: Maintaining feeder operations on a sheetfed press throughout press run assuring sheets are fed into press properly. Attachment ?C, Page 4 MOTHERAL PRINTING COMPANY JOB DESCRIPTIONS Tob Title: Manager Bindery Basic Function: Managing, developing, and improving all finishing, shipping, mailing, and fulfillment operations. Job Title: Supervisor Bindery Basic Function: Directing and monitoring all activities relating to bindery operations. Job Title: Operator Cutter Basic Function: Setting up and loading cutter with appropriate materials and directing support personnel assuring a quality product is being produced. Job Title: Operator Folder Basic Function: Setting up and loading folder with appropriate stock and directing support personnel assuring a quality product is being produced. Job Title: Operator Stitcher Basic Function: Setting up and operating stitcher and directing support personnel assuring that a quality product is being produced. Job Title: Operator Perfect Binder Basic Function. Setting up and operating Perfect Binder and other associated equipment and directing support personnel assuring a quality product is being produced. Job Title: Bindery Helpers Basic Function: Assisting bindery operators to feed product into bindery machinery, and to collect and package finished product. Job Title: Mailroom Supervisor Basic Function: Supervising mailroom personnel to assure that product is prepared and completed before shipping and mailing. Job Title: Mail Machine Operator Basic Function: Preparing, sorting and separating mail according to class. Job Title: Feeder (Mailroom) Basic Function: Feeding correct versions of books to be labeled into mail machine. Job Title: Fulfillment Supervisor Basic Function: Organizing and supervising daily production of the Fulfillment area of the company. Attachment 7C, Page 5 MOTHERAL PRINTING COMPANY JOB DESCRIPTIONS Job Title: Fulfillment Helper Basic Function: Finishing out jobs according to customer requirements ensuring that a quality product is delivered to customer. Job Title: Traffic Manager Basic Function: Overseeing and supervising the daily operations of shipping and receiving. Job Title: Shipping Coordinator Basic Function: Presetting and arranging the delivery of outgoing freight. Job Title: Shipping Clerk Basic Function: Assisting Shipping personnel in preparing product for delivery. Job Title: Driver Basic Function: Transporting products to the required places ensuring proper and timely delivery. CITY OF FORT WORTH APPLICATION FOR COMMERCIAL/INOUSTRIAL TAX ABATEMENT ATTACHMENT 70 EMPLOYEE BENEFITS PACKAGE , Attachment 7D, Pa2e I .......... Alotheral Printing Co. Benefits Summary - 2001 Oro, "Hourly Employees" PacifiCare B2q0 Eligible Vt of the month following 60 days of service) (NQC pays 80%of employee's portion of monthly HMO premium and 30%of dependent portion of monthly HA40 premium) Weekly HMO Premium Paid by Employee Employee Only $ 9.53) Employee& Spouse 52.87 Employee& Child(ren) 43.20 Employee& Family 74.88 "Exempt Employees" PacifiCare HMO (Eligible I"of the month following 60 days of service) (WC pays 80%of employee's portion of monthly HMO premium and 30%of dependent portion of monthly HMO premium.) Weekly HMO Premium Paid by Employee Employee Only S 9,53) Employee& Spouse 52.87 Employee& Child(ren) 43.20 Employee& Family 74.88 "All Employees" Dental (DMO & Indemnity) (Eligible 0 of the month following 60 days of service) (Employee pays ftffl cost of dental premiums.) Weekly Dental DMO Weekly Dental Indemnity Premium Paid by Employee Premium Paid by Employee Employee Only $ 2.79 $ 5.44 Employee Plus One 5.45 10,13 Employee Plus Family 9.28 16.28 Life Insurance* (Eligible I"of the month following 60 days of service) (NVC pays full cost of basic life.) Employee: Equivalent to 1 X Annual Base Salary to S 100,000 Spouse: $10,000 Child: $5,0100 (*Supplemental Life Insurance through our group plan is available for purchase by the employee for up to the lesser of 2 times annual base salary or 5100,000.) Accidental Death (Eligible Vt of the month following 60 days of service) &Dismemberment Employee: Equivalent to IX Annual Base Salary to $100,000 (NUC pays full cost) Short-Term Disability (Eligible Vt of the month following 60 days of service) (NIPC pays full cost) 70% of weekly earnings to a max of$500 per week Waiting Period—Accident: None Rev: 12/20/00 HR—Hourly Employees Attachment 7D, Page 2 Waiting Period-Sickness: 7 days Benefit Period: 13 Weeks Long-Term Disability Eligible I"of the month following 60 days of service (?vTC pays full cost) 60% of monthly earnings to a max of$6,000 per month Waiting Period: 90 days Accident or Sickness Additional Motheral Printing Co. Benefit Programs: 401k Retirement Plan li 'ble 1-4 calendar quarter following 6 months of service MPC contributes on a percentage basis to an employee's contribution. Section 125/Flea Plan (Eligible 1st of the month following 60_d,ys of service) Pre-tax contribution option allows employees to make contributions toward medical insurance, out-of-pocket medical expenses or dependent care expenses on a pre-tax basis rather than an after-tax basis. Medical Reimbursement Plan: Employees may make contributions to this plan on a pre-tax basis and reimburse themselves during the year for medical expenses not covered by insurance. (See plan document for details and restrictions.) 10"JK Dependent Care Reimbursement Plan: Employees may make contributions to this plan on a pre-tax basis and reimburse themselves during the year for dependent care expenses. (See plan document for details and restrictions.) Vacation (Eligible after one Year of service) After One Year of Service: One Week of Vacation Two to Nine Years of Service: Two Weeks of Vacation Ten Years of Service: Three Weeks of Vacation Holiday (Eligible from Date of Hire) New Year's Day Memorial Day Independence Day -July 4ffi Labor Day Thanksgiving (Thursday and Friday) Christmas Educational Assistance (Eligible after completing 1 Year of service) Program Up to $500 per year reimbursement of job-related educational expenses. Rew 12/20/00 HR-Hourly Empiovees I QTY OF FORT WORTH APPLICATION FOR COMMERCIAL/INDUSTRIAL TAX ABATEMENT ATTACHMENT 15 TAX ABATEMENT REQUEST 1 Attachment 15 ATTACHMENT 15 TO City of Fort Worth Tax Abatement Application Why tax abatement is necessary for the success of'this project (Question #15). Motheral Printing Company is in an extremely competitive industry. Ranking in the top 300 companies (out of 40,000) in the United States, even makes the problem more acute. Almost all of the major printers in the country locate plants in rural areas in the Midwest. The reasoning is to achieve the very lowest occupancy cost possible. As you can see from the attached Printing Industry Ratio Study, the average costs for Real and Personal Property Taxes are .5% of total sales dollars. Although historically we have run approximately .8%, without abatements our percentage would be approximately 2.7% of sales in a new location, Even with the abatements we will only bring our percent to 1.9% leaving us still 1.4% over the national average of the industry. In an industry with a pre tax profit average of 3.2 % to 8.1 % of sales, the 1.4% overage could eat up to one-half the entire profit of the company. Motheral Printing Co is working hard to stay at home. We truly want to be here. If we jeopardize the health of the company, we will jeopardize the very existence of those Ft. Worth jobs we hope to keep in Ft Worth. Obviously we can't compromise the health and strength of the company. Motheral Printing Co is trying to make a Ft. Worth location work, but we desperately need every bit of help the City can give mmzoo/ �� ~~~�~~ �" � MotheraU Printing Co. Tax Abatement Structure Motheral would receive a graduated ten-year tax abatement on real and personal property that could reach a maximum of 10096 uoouui!y. The ubutoozont incorporates Motbtra|'u construction costs, wockthcoe` and supply and service spending no an annual basis at the site located in the South Enterprise Zone and designated "Ccobu) City". The proposed tux abatement structure inuofollows: 0 lhO,00O SQ. FT * $29,500,000 Investment * Enterprise Zone and"Central City" 0 255 Full Time Posdoouvv/Beoefitu 0 $4U0,0OO Annual Spending 1' Construction: 20% maximum m For spending 40% of the total construction cost with Fort Worth cuobaok)ra, MoUhcra) will receive 10 percentage points of tax abatement. 0 For spending 596 of total construction cost with B&qXrBE contractors, Motborul will receive an additional 10 percentage points of tax abatement. o The fivalabatement percentage for construction will hcin effect for the full term of the abatement period. -^ Supply& Service Spending: 10% maximum • For spending 25% of local discretionary tbodo with Fort Worth suppliers, Motbnru) will receive 5 percentage points of tax abatement. • For spending 15% of local discretionary funds with codified M/WBE suppliers, Motbens| will receive 5 percentage points oftax abatement. Certified Fort Worth NVWBE companies will count utl,5times. 3' Retention: 50% maximum • For retaining 255 positions, including the current number of employees who are Fort Worth and "Central City" residents (l\ lFW' 77CC)' Mutberal will receive 5U percentage points ofabatement. • If less than I 1 BVV residents are employed, the uhutnrnent will be reduced by V2 percentage point for each person below ll|. lf less than 77CC residents are employed, the abatement will be reduced hyV2perceotuge point for each person below 77. Creation: 20% maximum ° For each uddid000iF\� resident above the )ll base ounznzitueotofF\� cnoplVyeea` ��otberu\ vvUl obtain uo 0"" additional V2penreotage point oftax uhu0oozeo1. * For each CC resident above the 77base coououitoeotofCCemployees, Mutbcral will receive an additional Y2 percentage point uf tax abatement. Exhibit C MOTHERAL PRINTING COMPANY 510 South Main Street Fort Worth, Texas 76104 817.335.1481 May 8, 2001 Mr. Tom Higgins Fax: 817.871.6134 Director of Economic Development Office of City Manager City of Fort Worth 1000 Throckmorton Street Fort Worth, Texas 76102 Re: Motheral Printing Co. Tax Abatement Request Dear Tom: I am writing in response to your inquiry concerning Motheral Printing Co and our local competition. As we have discussed, Motheral is now the 198th largest printer in the country as measured by the national trade magazine Printing Impressions. This ranking is out of a total number of approximately 40,000 printers in the U.S. industry. Achievement of this size has forced us to focus on a specialized market, producing primarily magazines, large direct mail,and corporate commercial printing. Most work is under long term contract and working agreements. Over 50% of our annual orders account for 85% of our total annual sales volume.All of which is work produced for clients outside the City of Ft. Worth. Therefore the remaining 15% of our total volume is produced for clients in The City of Ft. Worth. Our largest accounts are still those publishers outside The State of Texas. Most local printers are incapable of servicing such client base, due to their lack of size and equipment. Finally, due to our recent closure of our Small Press Division we reduced our Fort Worth sales by 35%. We now have virtually no competitive position to speak of with any Fort Worth printer. Should you need additional clarification or verification of such information, please feel free to contact me. Sincerely, David Motheral Jr. Page 1 of 2 07/19/01 XON 14: 17 FAX 817 332 4253 SPRINT PRESS 0001 saw 4. .r Y& Vow Exhibit C c.- %, \001 LOS Ti SPIA ZoS%- -a I 03 ro'409 Date: 5/7/01 Mayor Kenneth Barr City of Fort Worth 1000 Throckmorton Ft, Worth, Texas 76102 RE: Motheral Printing Co. Dear Ken, I would like to go on rccord as supporting the Motheral tax break. There is a legitimate need and benefit to Ft. Worth. The need goes to the fairness issue of the property tax. As currently crafted, capital intense industries such as printing concerns are inequitably taxed. For example, a 30 million dollar law firm, engineering firm, or accounting firm is paying a minor property tax on desks and computers, whereas this is only the starting point for the same size printing operation. Of course, this does not even begin to consider the difference in the profit margin of these industries. In short, it is an unfair Lax on high capital intense indusLries. Second is the benefit to Ft. Worth. Motheral is in the same position as Sprint Press. Currently over 50% of our business is outside of Tarrant County. To support this type of business and justify a five to six million-dollar printing press, we have to secure business outside of Tarrant County. Quite simply there is not enough local business to fill up the equipment and make the payments. Therefore, with our thin profit margins we have to use every break and incentive we can. Moving to another location has to be a consideration. Therefore, the key is the size of the expansion and the market that expansion will serve. If it is for a customer base outside of Tarrant County, then the city ought to help. Best Regards, Bob Williams Cc: him Motheral Page 2 of 2