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HomeMy WebLinkAboutIR 7518 Page 1 of 2 INFORMAL REPORT TO CIT1 :OUNCIL MEMBERS No. 7518 F�_ To the Mayor and Members of the City Council March 26, 1991 0 A TExA� Subject: Proposed Tax Abatement for Pastusek Industries at ,e)l Advantage Business Park and Oakbrook Mall in the South Enterprise Zone The City of Fort Worth has received a tax abatement application from Pastusek Industries for Advantage Business Park at 2008 Martin Luther King Freeway and Oakbrook Mall at Riverside and Berry. BACKGROUND: In 1990 , Pastusek Industries purchased these two vacant and neglected properties in southeast Fort Worth with plans to renovate the structures for the relocation and expansion of its manufacturing operations . While much attention was given to the purchase of Oakbrook Mall , often overlooked is the fact that Oakbrook Mall was purchased as part of a two-phase development . Advantage Business Park is complete and in full operation, and now the second phase, Oakbrook Mall , is ready for renovation if proper funding can be arranged. In August 1990 , Pastusek Industries received state designation as an enterprise project in the South Enterprise Zone. Refund of certain state sales tax is dependent on new jobs being filled by zone residents or disadvantaged persons . A tax abatement agreement could not be considered until the property ownership was transferred. Pastusek Industries consolidated and moved its manufacturing operations and 46 jobs to Advantage Business Park in June 1990 under a lease purchase agreement . The facility had never been occupied and was in very poor condition. During the last half of 1990 , Advantage Business Park was renovated and the Pastusek Industries ' business expanded with 54 new jobs. In November 1990, the property was finally purchased by Pastusek Industries, Inc. Title to Oakbrook Mall was also transferred to Mike Pastusek during 1990 . The growth of Pastusek Industries requires expansion of the business beyond the Advantage Business Park site, and the company is prepared to expand into Oakbrook Mall . However , at this point Pastusek has been unable to find accept- able financing. The present plan of action is to fund the renovation from the Pastusek Industries cash flow, and although this will be a slower process , it will allow the company to continue to grow. Although some back taxes from the previous owner remain due, the tax payments according to the current payout schedule have been made as scheduled, and the initial work at Oakbrook Mall has begun. ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS Page 2 of 2 INFORMAL REPORT TO CITE :OUNCIL MEMBERS No. 7518 00CX1To the Mayor and Members of the City CouncilMarch 26, 1991 Subject: Proposed Tax Abatement for Pastusek Industries at Advantage Business Park and Oakbrook Mall in the South Enterprise Zone RECOMMENDATION• The significance of the Oakbrook Mall/Advantage Business Park renovation project in the redevelopment strategy of the inner-city area cannot be overstated. The creation of employment opportunity, stabilization of the declining neighborhood and precedent for other industries to locate in the South Enterprise Zone support the application from Pastusek Industries for the City's assistance through tax abatement for increased value at Oakbrook Mall/Advantage Business Park which might result from new construction or modernization. The staff is recommending 100% abatement for a 10-year period for qualified improvements after January 1 , 1991 and subject to all taxes being paid and kept current . An M&C to set the public hearing date for establishing a reinvestment zone will be placed on the March 26 Council agenda for action. Da d I ory City Manager Attachment : Pastusek Industries, Inc. , Tax Abatement Application ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS APPLICATION FOR TAX ABATEMENT CITY OF FORT WORTH 1. Property Owner. PASTUSEK INDUSTRIES, INC. Company orPmject Name: PASTUSEK INDUSTRIES , INC. ( ADVANTAGE BUS NEI SS 'PARK) Mailing Address: PASTUSEK INDUSTRIES, INC. 2008 MARTIN LUTHER KING FREEWAY FORT WORTH . TEXAS 76104-630 Telephone Number. ( 817 ) 536-5101 Company representative to be contacted: Name and title: MIKE PASTUSEK, OWNER Mailing Address: PASTUSEK INDUSTRIES, INC. 2D08 MARTIN LUTHER KING FREEWAY FORT WORTH , TEXAS 76104-6306 Telephone Number. ( 817 ) 536-5101 2. Project Description and L,ocation:RESTORE AND RENOVATE ADVANTAGE BUSINESS PARK LOCATED AT 2008 MARTIN LUTHER KING FREEWAY FROM A COMMUNITY EYE- SORE TO A VIBRANT JOB PRODUCING ENTITY. P. I . MOVED INTO THESE FACIL- ITIES IN JUNE , 1990 UNDER A LEASE PURCHASE AGREEMENT. P. I . BOUGHT THE PREMISES ON NOVEMBER 15 , 1990 AND FINISHED THE PROJECT FEBRUARY, 1991 3. Brief description of activities to be performed at this location, including a description of products to be produced and/or services to be provided: CONTRACT MANUFACTURING IS PERFORMED AT THIS LOCATION. PRODUCTS ARE CUSTOM MANUFACTURED METAL PARTS FOR CONSUMER, ENERGY AND ELECTRICAL ORIGINAL EQUIPMENT MANUFACTURERS . h. Date Projected for Occupancy of Project/Initiation of Operations: JUNE, 1990 ; PROJECT PRESENTLY COMPLETED. 5. EligibiQty.Criteria (Attach statement describing how project meets tax abatement policy criteria): CREATES 54 ( BASED ON JUNE 1990 @46 ; PRESENT 100 ) NEW PERMANENT JOBS ; 25% OF ALL NEW EMPLOYEES ARE EITHER ECONOMICALLY DISADVANTAGED OR LIVE IN ECONOMICALLY DISADVANTAGED AREAS OR BOTH. PROJECT IS LOCATED IN ECONOMICALLY DISADVANTAGED ZONE. 6. Project Fiscal Impact A. Existing Value (per Tarrant Appraisal District): ( 1990 ) 1. Land S 103 , 563 2. Improvements $ 221 , 396 3. Personal Property $ -0- ED012991 Page 1 of 4 B. Estimated Total Cost of Project (Le.,new value): 1. Site Development 5 2. Structures $ 495 , 000 3. Personal Property $ 1 . 5 0 0 . 0 0 0 7. Local Business/DBE Impact:- A. mpactA. Percentage of Project Development and Construction Dollars to be Spent With Fort Worth Based Contractors or Sub-Contractors: 100 ?6 B. Percentage of Project Development and Construction . . Dollars to DBE (Disadvantaged Business Enterprises): -0- 9. 8. Employment Impact A. Construction Employment Estimates: 1. Start: Month/Year 6 / 90 2. Completion Date: 3 /91 3. Number of Construction jobs: 20 4. Estimated Total Construction Payroll: 200 , 000 B. Permanent, Full-Time Employment Estimates at Project Location*: 1. Current (if applicable): a. Annual payroll: 2 , 100 ,000 b. Number of permanent, full-time employees: 46 2. At Start/Opening Date: a. Annual payroll: 1 b. Total number of permanent, full-time employees: c Number of employees transferred from outside the city of Fort Worth: -0- d. 0- d. Number of new permanent full-time jobs: 5 4( FALL 19 9 0 ) e. Percentage of new jobs to be filled by Fort Worth residents: 100% - 3. 5 Years After Opening. NOTE : DUE TO SPACE LIMITATIONS ALL NEW JOBS OVER THE PRESENT 100 WILL BE LOCATED AT OAK BROOK MAL a. Annual payroll: b. Total number of permanent, full-time employees: c Number of employees transferred from outside the city of Fort Worth: d. Number of new permanent full-time jobs: e. Percentage of new jobs to be filled by Fort Worth residents: i *Each application will be reviewed on its merits. However,absent extraordinary circumstances,a minimum of?5% of the employees should be Fort Worth residents. Comparry shall report annually and a prorata reduction of the abatement may occur if the percentage is not met. ED012991 Page 2 of 4 • • Taw 4. 10 Years After Opening: NOTE : DUE TO SPACE LIMITATIONS ALL NEW -JOBS OV1,R THE PRESENT 100 WILL BE LOCATED AT OAK BROOK' a. Annual payroll• MALL. b. Total number of permanent, full-time employees: c Number of employees transferred from outside the city of Fort Worth: d. Number of new permanent full-time jobs: . e. Percentage of new jobs to be filled by Fort Worth residents: C. Types of Jobs Created job Titles) CLERK/TYPIST $6-8/HR. MACHINISTS $404-654 /WEEK TOOL MANAGER $423-673/WEEK TRAINEES/OPERATORS $5-8/HR. SHIPPING/RECEIVING $6-8/HR. LEAD OPERATORS $8-10/HR. AVERAGE WAGE IS $18 , 202 .93/YR PACKAGERS $5-8/HR . - 9. Describe Any Off-Site Infrastructure Requirements: Water. NONE SanibuySewer. NONE Streets: NONE Storm Sewer. NONE Other. NONE 10. Is Property Zoned Appropriately? Yes X No Current Zoning. I Requited Zoning. T 11. Is Property Platted? i Yes t No Will Replatting be Necessary? Yes No ?t ED012991 Page 3 of 4 1 • C=OF FORT WORTH APPLICATION FOR TAX ABATEIIIENT 12. Impact on Local Business (When Project is Fully Operational): (WITHOUT OAK BROOK CONS IDERATI NS) A. Annual value of total supplier and services contracts: $ 3 , 000 . 000 B. Percentage of total supplier and services contracts to be awarded to Fort Worth businesses: 25 . C Percentage of total supplier and services contract dollars to be awarded to DBE: —0— 91, P. I. IS RESEARCHING DBE SUPPLIER 13 Describe any other direct benefits to the City of Fort Worth as a result of this project(e.g.,sales tax revenue): ,SEE 15 14. Environmental Impacts, if any, created by the project: REMOVES COMMUNITY AND CITY EYESORE; NO NEGATIVE ENVIRONMENTAL SITUATI NS �TWILL BE CREATED. 15. Justification for Tax Abatement Request (Attach documentation to substantiate and more fully describe the justification for this request. Include the amount of the abatement requested and show how it will contribute to the financial viability of the project.) 16. Financial Information-Attach a copy of the latest audited financial statements or,in the case of a new project, a business plan. The application for tax abatement is submitted with the acknowledgment that additional certified financial information may be required. It is further understood and acknowledged that the City Council of the City of Fort Worth encourages the use of local consultants,construction firms and suppliers(with special emphasis given to disadvantaged business enterprises)and that,if approved,the final abatement agreement will require use of local firms when possible in conjunction with this project. cl�4� Authart,a Si re ` MARCH 8 , 1991 Date ED012991 Page 4 of 4 t 15 . JUSTIFICATION FOR ADVANTAGE BUSINESS PARK PASTUSEK INDUSTRIES, A DESIGNATED ENTERPRISE PROJECT, HAS FUL- FILLED ITS PREVIOUS STATED GOALS AT ADVANTAGE BUSINESS PARK. P. I . HAS : 1 ) REBUILT A COMMUNITY, CITY AND STATE EYESORE INTO AN ATTRACT- IVE JOB PRODUCING ENTITY. 2 ) CREATED OVER 54 NEW POSITIONS WHICH EMPLOY MANY FT. WORTH RESIDENTS, SEVERAL OF WHOM ARE ECONOMICALLY DISADVANTED AND WHO ALSO LIVE IN THE DISADVANTAGED SOUTH ENTERPRISE ZONE. 100 EMPLOYEES AT THIS LOCATION WILL GENERATE AN ANNUAL PAYROLL OF OVER $2 , 000 , 000 . 3 ) ADDED CLOSE TO $2 , 000 , 000 TO COMMUNITY TAX ROLLS . 4 ) ADDED NO ADDITIONAL DRAW ON CITY, COUNTY, SCHOOL OR HEALTH SERVICES. 5 ) ADDED OVER $3 , 000 , 000 IN SUPPLIER AND SERVICE CONTRACTS TO FT. WORTH ' s LOCAL ECONOMY. SPECIAL CONSIDERATION IS BEING GIVEN TO FT. WORTH DBEs ONCE THEY ARE IDENTIFIED. 6 ) NOT REQUIRED ANY NEW INFRASTRUCTURE FROM CITY OR COUNTY. 7 ) NOT REQUIRED ANY NEW ZONING OR REPLATTING. 8 ) IMPACTED POSITIVELY ON COMMUNITY' s PHYSICAL, SOCIAL AND ECONOMIC HEALTH . WHAT P. I . HAS DONE AT ABP IS TOTALLY CONSISTENT WITH THE CITY's NEAR AND LONG TERM GOALS . FOR THIS REASON, P. I . DESIRES 100% ABATEMENT AT THIS FACILITY. APPLICATION FOR TAX ABATEENT CITY OF FORT WORTH I. Property Owner. MIKE PASTUSEK Company or Project Name: OAK BROOK MALL Mailing Address: MIKE PASTUSEK, PASTUSEK INDUSTRIES, INC. 2008 MARTIN .LUTHER KING FREEWAY FORT WORTH, TEXAS 76104-6303 Telephone Number. ( 817 ) 536-5101 Company representative to be contacted: Name and title: MIKE PASTUSEK Mailing Address: MIKE PASTUSEK, PASTUSEK INDUSTRIES . INC. 2008 MARTIN LUTHER KING FREEWAY FORT WORTH, TEXAS 76104-6303 Telephone Number. ( 817 ) 536-5101 2. Project Description and Location: RFSTnRF ANn RFNOVATF TjaF nau PjRnc)x MALL I'RGZi:STY LOCATED AT BERRY & RIVERSIDE 3. Brief description of activities to be performed at this location, including a description of products to be produced and/or services to be provided: DUE TO THE NEED TO EXPAND P. I . ' s ABP FACILITY, 180,, 000 SO. FT. OF OAK BROOK MALL WILL BE NEEDED FOR CONTRACT MANUFACTURING. THE REMAINING 220 , 000 SQ. FT. WILL BE LEASED TO RETAIL AND SERVICE PROVIDERS. 4. Date Projected for Occupancy of 3/91 : FORMER MONTGOMERY WARD BUILDING WILL BE Project/Initiation of Operations: ttSFn FOR STORAGE - EPENDENT ON FINANCING, THE M�.W. �BLDG. COULD I BSE USED FOR MANUFACTURING IN 9/91 ; THE RETAIL AND 5. Eligibility Cr tenal ►ttach state menijescri ng�iow pmjec�m'Js fax abatement policy criteria): CREATES 300 NEW PERMANENT JOBS : 25% OF ALL NEW EMPLOYEES ARE EITHER ECONOMICALLY DISADVANTAGED OR LIVE IN ECONOMICALLY DISADVANTAGED AREA OR BOTH . PROJECT IS LOCATED IN THE SOUTH ENTERPRISE ZONE. 6. Project Fiscal Impact A. Existing Value (per Tarrant Appraisal District): 1. Land i $ 4gn , 9iR 2. Improvements $ 11, 17 9 3. Personal Property $ 0 ED012991 Page 1 of 4 CITY OF F WORTH APPLICATION FOR TAX_,,ytTEMENT B. Estimated Total Cost of Project (i.e., new value): 1. Site Development $ 220 ,000 . 2. Structures $ 2 , 020 , 000 . 3. Personal Property $ 1 , 000, 000 . 7. Local Business/DBE Impact: A. Percentage of Project Development and Construction Dollars to be Spent With Fort Worth Based Contractors or Sub-Contractors: 100 B. Percentage of Project Development and Construction Dollars to DBE (Disadvantaged Business Enterprises): 10 96 8. Employment Impacfi A. Construction Employment Estimates: - 1. Start: Month/Year 1 / 91 2. Completion Date: 11 /91 3. Number of Construction jobs: 50 4. Estimated Total Construction Payroll: 11000 , 000 . B. Permanent, Full-Time Employment Estimates at Project Location': 1. Current (if applicable): a. Annual payroll: -0- qMW b. Number of permanent, full-time employees: -0- 2. 0-2. At Start/Opening Date: a. Annual payroll: i 0 n o n_, n n n b. Total number of permanent, full-time employees: 50 c. Number of employees transferred from outside the city of Fort Worth: -0- d. Number of new permanent full-time jobs: 50 e. Percentage of new jobs to be filled by Fort Worth residents: 95% 3. 5 Years After Opening- a. peninga. Annual payroll: 6 .n n n y n n n _ b. Total number of permanent, full-time employees: 300 c. Number of employees transferred from outside the city of Fort Worth: -0- d. n- d. Number of new permanent full-time jobs: '400 e. Percentage of new jobs to be filled by Fort Worth residents: 95% i 'Each application will be reviewed on its merits. However, absent extraordinary circumstances, a minimum of 25% of the employees should be Fort Worth residents. Company shall report annually and a prorata reduction of the abatement may 17 occur if the percentage is not met. ED012991 Page 2 of 4 CITY OF FORT WORTH APPLICATION FOR TAX ABATEMENT 4. 10 Years After Opening. a. Annual payroll: 10 , 000 . 000 . - b. 0 . 000 . 000 .b. Total number of permanent, full-time employees: 5M' 0.' c. Number of employees transferred from outside the city of Fort Worth: -0- d. Number of new permanent full-time jobs: 500 e. Percentage of new jobs to be filled by Fort Worth residents: 95% C. Types of Jobs Created Qob Titles) OFFICE/ACCOUNTING/DATA PROCESSING OPERATORS SHIPPING/RECEIVING LEAD OPERATORS MACHINISTS MANAGEMENT - MANUFACTURING MANAGEMENT - PERSONNEL 9. Describe Any Off-Site Infrastructure Requirements: MANAGEMENT - FINANCE Water. SanitarySewer. -0- Streets: 0-Streets: -0-Storm Sewer. -0- Other. 0-Other -0-10. Is Property Zoned Appropriately? Yes X No Current Zoning: K Required Zoning: K 11. Is Property Platted? r Yes X No Will Replatting be Necessary? Yes No X ED012991 Page 3 of 4 1 CITY OF FC%W WORTH APPLICATION FOR TAX A IrEMENT 12. Impact on Local Business (When Project is Fully Operational): A. Annual value of total supplier and services contracts: $ 10 . 000 . 000 . B. Percentage of total supplier and services contracts to be awarded to Fort Worth businesses: 25 % C. Percentage of total supplier and services contract dollars to be awarded to DBE.- in BE:i0 % 13. Describe any other direct benefits to the City of Fort Worth as a result of this project(e.g.,sales tax revenue): NORTH END OF MALL WILL BE 100 , 000 SO. FT. OF COMMERCIAL PROPERTY. THIS WILL PROVIDE AN ESTIMATED FIRST YEAR SALES TAX REVENUE OF $400 , 000 . 14. Environmental Impacts, if any, created by the project: REMOVES CITY AND COMMUNITY EYESORE; NO NEGATIVE ENVIRONMENTAL IMPACTS. I& justification for Tax Abatement Request (Attach documentation to substantiate and more fully describe the justification for this request. Include the amount of the abatement requested and show how it will contribute to the financial viability of the project.) 16. Financial Information-Attach a copy of the latest audited financial statements or,in the case of a new project, a business plan. The application for tax abatement is submitted with the acknowledgment that additional certified financial information may be required. It is further understood and acknowledged that the City Council of the City of Fort Worth encourages the use of local consultants,construction firms and suppliers(with special emphasis given to disadvantaged business enterprises)and that,if approved,the final abatement agreement will require use of local firms when possible in conjunction with this project. ZZ Aut o 'ze ign MARCH 8 , 1991 Date ED012991 Page 4 of 4 15 . JUSTIFICATION AT OAK BROOK Mike Pastusek, owner of Pastusek Industries , Inc. , proposes to do at Oak Brook Mall, dependent on financing, what he has already done at ABP. That is to: 1 ) Rebuild a community, city, state and national eyesore into an attractive job producing entity which will provide manufactur- ing, retail and social services to the community. 2 ) Create over 300 new jobs with an annual payroll of over $6, 000 ,000. 3 ) Construct with Ft . Worth sub-contractors (Mr. Pastusek will be his own contractor) with special consideration given to Ft . Worth DBEs. 4 ) Add over $10 , 000 , 000 annually in supplier and service contracts to Ft . Worth 's local economy. Special consideration will be given to Ft . Worth DBEs. 5 ) Generate over $400 , 000 in sales tax in the first 12 months of operation of the retail portion of the facility. 6) Add over $3 ,000, 000 to community tax rolls . 7 ) Not require any new zoning or replatting. 8 ) Not require any new infrastructure from city. 9 ) Not draw additionally on city, county, school or health services. 10 ) Impact positively on community 's physical, social and econ- omic environment . Mike Pastusek has a track record with ABP. He did, and is doing, what he said he was going to do. Due to the need to expand this Fort Worth business , work has already started at Oak Brook Mall. The old Montgomery Ward building, which is being used as a storage facility, has passed an ordinance inspection and has received a certificate of occupancy. City support will be needed to complete the project . It is believed that if the City approves 100% tax abatement at both ABP and Oak Brook that this action might influence the financial community into looking even more favorably at this project.