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Home My WebLink About2018-03-05 Agenda with BackupCit of Denton City Hall Y 215 E. McKinney St. Denton, Texas 76201 �'�, �u www.cityofdenton.com ��'��"�-�'� Meeting Agenda City Council Monday, March 5, 2018 11:30 AM Work Session Room After determining that a quorum is present, the City Council of the City of Denton, Texas will convene in a Work Session on Monday, March 5, 2018 at 11:30 a.m. in the Council Work Session Room at City Hall, 215 E. McKinney Street, Denton, Texas at which the following items will be considered: 1. Work Session Renorts A. II) 18�350 Receive a report, hold a discussion, and give staff direction regarding an incentive request from United States Cold Storage. Attachments: Exhibit 1- Aqenda Infarmatian Sheet Exhibit 2- USCS Incentive Applicatian Exhibit 3 - Presentatian B. II) 18�351 Receive a report, hold a discussion, and give staff direction regarding an incentive request from Fisher59. Attachments: Exhibit 1- Aqenda Infarmatian Sheet Exhibit 2- Fisher59 Incentive Applicatian Exhibit 3 - Presentatian 2. Concluding Items A. Under Section 551.042 of the Texas Open Meetings Act, respond to inquiries from the City Council or the public with specific factual information or recitation of policy, or accept a proposal to place the matter on the agenda for an upcoming meeting AND Under Section 551.0415 of the Texas Open Meetings Act, provide reports about items of community interest regarding which no action will be taken, to include: expressions of thanks, congratulations, or condolence; information regarding holiday schedules; an honorary or salutary recognition of a public official, public employee, or other citizen; a reminder about an upcoming event organized or sponsored by the governing body; information regarding a social, ceremonial, or community event organized or sponsored by an entity other than the governing body that was attended or is scheduled to be attended by a member of the governing body or an official or employee of the municipality; or an announcement involving an imminent threat to the public health and safety of people in the municipality that has arisen after the posting of the agenda. NOTE: The City Council reserves the right to adjourn into a Closed Meeting on any item on its Open Meeting agenda consistent with Chapter 551 of the Texas Government Code, as amended, or as otherwise allowed by law. CERTIFICATE I certify that the above notice of ineeting was posted on the bulletin board at the City Hall of the City of Denton, Texas, on the day of , 2018 at o'clock (a.m.) (p.m.) Page 1 Printed on 3/2/2018 City Council Meeting Agenda March 5, 2018 CITY SECRETARY NOTE: THE CITY OF DENTON CITY COUNCIL WORK SESSION ROOM IS ACCESSIBLE 1N ACCORDANCE WITH THE AMERICANS WITH DISABILITIES ACT. THE CITY WILL PROVIDE SIGN LANGUAGE 1NTERPRETERS FOR THE HEARING IMPAIRED IF REQUESTED AT LEAST 48 HOURS 1N ADVANCE OF THE SCHEDULED MEETING. PLEASE CALL THE CITY SECRETARY'S OFFICE AT 349-8309 OR USE TELECOMMUNICATIONS DEVICES FOR THE DEAF (TDD) BY CALLING 1-800-RELAY-TX SO THAT A SIGN LANGUAGE 1NTERPRETER CAN BE SCHEDULED THROUGH THE CITY SECRETARY'S OFFICE. page Z Printed on 3/2/2018 City Hall City of Denton 215 E. McKinney St. Denton, Texas 76201 ��,� I�Illlll�uuuuuuu��ii www.cityofdenton.com ��'�� Legislation Text File #: ID 18-350, Version: 1 AGENDA CAPTION Receive a report, hold a discussion, and give staff direction regarding an incentive request from United States Cold Storage. City of Denton Page 1 of 1 Printed on 3/2/2018 I7c��w[��>i[>[i hy I [��>r;i�tf�ar��nv� City of Denton _ . City Ha11 �� 5 215 E. McKinney Street tiY �� " Denton, Texas www. cityo fdenton. com DEPARTMENT: CM/ DCM/ ACM: DATE: AGENDA INFORMATION SHEET Economic Development Bryan Langley March 5, 2018 SUBJECT Receive a report, hold a discussion, and give staff direction regarding an incentive request from United States Cold Storage. BACKGROUND United States Cold Storage (USCS) provides its clients with refrigerated and frozen food warehousing and transportation with 38 facilities in 13 states and 2,500 employees. USCS' clients include Kraft, Kellogg's Unilever, Butterball, and many others. USCS has four existing facilities in Dallas, Fort Worth, and Arlington. Started as American Ice Company in 1899, it was renamed United States Cold Storage in 1920 and became a wholly owned subsidiary of John Swire & Sons in 1982. PROJECT On Feb. 2, 2018, USCS closed on a 40-acre site on Jim Christal Road east of Western Boulevard in the Westpark Tax Increment Reinvestment Zone (TIRZ). USCS plans to offer storage, re-pack, case pick, distribution and transportation solutions for production facilities in the United States and Mexico. Preliminary plans provide for rail service, export services to Mexico, cooler and freezer storage, and on- site customer offices. The facility will use a COz over ammonia cascade refrigeration system, which uses about one quarter of the ammonia required in older systems and keeps the ammonia confined to the facility's engine room. USCS estimates that it will invest $34 million in the project, which will create approximately $28 million in new ad valorem value in Denton. The estimated electric demand is 1.5 megawatts annually, which will make USCS a Top 25 customer for DME. The company plans to create 67 new jobs by Year 3 of operations with an average salary of $36,074; USCS employs the majority of its staff on a full time basis, making them benefits eligible. After submitting its Incentive Application, USCS asked to provide supplementary salary information based on including overtime for administrative and warehouse positions. Incorporation of overtime brought the average salary to $42,637 (or $1830/hour). The majority of the jobs will not be high-skilled. The location of this project will necessitate Phase 2 of the Westpark TIRZ improvements, which generally consist of water and wastewater line extension and improvements, drainage improvements, and road reconstruction, all along Jim Christal Road and West Oak Street. Under the Westpark TIRZ, both the City and Denton County contribute 40% of the ad valorem tax revenue generated within the TIIZZ to a fund that is used to reimburse the developer for the cost of infrastructure improvements. While the location of companies in the TIRZ generates revenue into the TIIZZ fund, tax incentives given to those companies reduce the amount of revenue that is available for reimbursement of improvement costs. INCENTIVE POLICY AND REQUEST The 2016 Policy for Tax Abatement and Incentives states that businesses many be considered for a tax abatement of 25% if at least $5 million in investment/new value is met. The length of the abatement increases with higher investment/value, but may not exceed 10 years. The percentage of the abatement can increase in 5% increments for "additional factors" that make the proj ect more desirable. The policy also identifies targeted sectors for recruitment, and USCS is not in a targeted sector. However, that does not disqualify the company from applying for an incentive. USCS requests the maximum allowable incentive under the policy. In its application cover letter, USCS states that "The City's approval of tax incentives goes a long way in demonstrating community support to our parent company, Swire. Incentives would allow final approval for construction of the proj ect." FISCAL INFORMATION Current Conditions Land� Impravemen�.s �usin�ss P�:ir��nal I�ropeir�y ��a�a� $�',131 *Land has an agricultural exemption currently Project Ad Valorem Valuation and Revenue r � $4� ��,�55�,5$2 ��,3 I �" �'�,�2�" +�LLp�Y�pY�� a� � 1��V}�i�./ +��p � wI' � r ' .� � � � � � r .•�. ' b o� M M �� • M ''... ...� I � .i • . • • • ''... *Market value used for estimate � t��Ir • • �,� �� I ' f }�L� INCENTIVE ANALYSIS Staff analyzed the project with a 6-year, 25% tax abatement model and a construction sales and use tax rebate model. Denton Municipal Electric's Economic Growth Rider incentive was included in both models. The Economic Growth Rider is offered to new customers on certain commercial rate schedules whose electric demand exceeds 1,000 kVA and load factor is greater than DME's system load factor. Under the Rider, a customer's monthly billing demand is reduced according to the following table: • 50% in Year 1 • 40% in Year 2 • 30% in Year 3 • 20% in Year 4 • 10% in Year 5 The following analysis summary table uses these assumptions: • Gross annual City tax revenue: $182,781 • Net annual City tax revenue: $117,323 • Annual City tax revenue available for abatement: $103,333 • Construction sales and use tax captured: $132,000 • DME Economic Growth Rider: $300,000 � ruc+erutives 25i� abatement $25,$33' �omst. sa�es & $ I �2,a00 use taac rebate [�ME EGR. $ I 00,400 city Rewen��e f"Jet ta�c revemue $q I ,490 $25,$3'3 $25,$33' $25,833' $80,000 $60,040 $40,000 $9 I ,494 $9 I ,490 $9 I ,490 $25,833' $25,$3'3 �zo,000 $9 I ,490 $9 I ,494 $ I 54,9�8 $ I �2,000 �o� o.000 ��s�,��s $54�,940 RECOMMENDATION Staff did not recommend ad valorem tax incentives for this project because of its location within the Westpark TIRZ. (Note: USCS will automatically be eligible for the approximately $300,000 DME Economic Growth Rider if it meets the demand threshold.) The Economic Development Partnership Board did not agree with staff's recommendation and opted to recommend a 5-year, 25% tax abatement, the construction sales and use tax rebate, and the DME Economic Growth Rider for a total incentive of $561,165 (6-1). STRATEGIC PLAN RELATIONSHIP The City of Denton's Strategic Plan is an action-oriented road map that will help the City achieve its vision. The foundation for the plan is the five long-term Key Focus Areas (KFA): Organizational Excellence; Public Infrastructure; Economic Development; Safe, Livable, and Family-Friendly Community; and Sustainability and Environmental Stewardship. While individual items may support multiple KFAs, this specific City Council agenda item contributes most directly to the following KFA and goal: Related Key Focus Area: Economic Development Related Goal: 3.4 Encourage development, redevelopment, recruitment, and retention EXHIBITS Exhibit 1— Agenda Information Sheet Exhibit 2 — Application Exhibit 3 — Presentation Respectfully submitted: Caroline Booth Director of Economic Development t�rajseo STATES COLD 5TF)RAG� United States Cold Storage, LP 2225 N. Cockretl HiII Rd. Dallas, TX 75212 ,Tanuary 2�4, 2017 Caroline �ooth, MPA City of Denton Department of Economic Development (940) 379-7751 Caroline, As United 5tates Cold Storaga, LP continues to expand, we are excited about the possibility of expa�ding oUr Dallas-Fort Worth inetroplex footprint. Denton, TX is our firsY choice to invest mvre than $35 anillion dollars and add ta the Sauthern Region's 85+ million cu.ft. In total, US Go[d has 38 faciIities across the United States and employs more than 250p paople. Ha�ing been in the Metraplex for mo�•e #han 60 years, we have strong relakionships with all the communities where our facilities are located. Within the last 12 months, USCS has built a third faciIity in Laredo, TX and expanded our facility in Covington, TN. As is the case witli the proposed project in Denton, we acquire enough properry to be prepared for future expansian and investment. In DFW, we currently have a total of four facilities r�vith a total of 32 miliion cu.ft. The new proposed building would add an estimated 6 rr�illion cu.ft, along with maz�e than 40 new jobs ta the City of Denton. We kindly ask for the Ciry of Denton's suppott in helping to move this project along by approving tax incentives. The City's approval of tax incentives goes a long way in demonstrating a eommunity's support to oirr parent company, Swire. Incentives would allow imal approval for construction af the project. Attached is our �conomic Incentive Application to the City of Dentan. We a�preciate your assistance in guiding us through the application process and the City of Danton staffwho have helped answer yuestions regarding our potential project. We look forward io contin€�ing to build the relations�ip between USCS and the City of Denton. Kiudest regards, Mr. George Cruz Senior Vice President United �tates Cald Starage, �.P Economic lncentive Application '--f City of Clenton, Texas a� ��, version OS17 DE�TTON � The City of �enton's EconomEc Development Department wifl use your responses Eo this a�pfication to pre�are an economic impact analysis of your ]ocatian or expansion prv�ect. Pfease enier the rec�uired information in the shaded cells or checic baxes. {f you have additional notes or information to include, insert rows or use Column K. Please attach any re�elant maps, plafis, metes ancE bounds, or renderings. Only complete appfications will be considered. If you need assisYance, call (940) 349-7776. Please email tf�e compleied quesYionnaire to Caroline.Booth@cityofdenton.com PLEAS� COMPLE�E AAGES fTABS11- 7 Today`s date: .1/24/2018 Cvmpany contact inforrr Name United 5tates Cold Storage, LP Address z01 I.aurel Rd,;'Suite 400 , City, 5#ate, �IP:.Voorhees, NJ,080�43 Website www.uscold:com . Person submitting the questionnaire: Name: George Cruz, -, Phone: (214} 212-7186 . Title Senior;Regional Vice President " Fax- �maiE gcru.z@uscold,com Person responsible for grant adminlstration: Name: George Cruz . Phone: (27,4) 2� i-718b Title Seniar'Regipnal Vice President Fax Email: gcruz@.uscold;com Brief description of company's history incfuding current operations: In 1899, aur forefather, The Amerl.can i�e:Company;.had a'JogisYies system still opera#ing.wiih ' horses and buggies. Our:name formatly changeci to the United 5iate� CoEtE 5torage (USCS} in 19Zd. Ip 1982, .USCS offlcially becarne a wholiy owned subsidiary of John Swire & Sons; Jaining ` 129,000 employees across the United 5tates, UK; Asia, ai�d Australia. Today, USCS has grown to 38 facilities across 13 states. . Companyownership:�Private�yHeld ❑PubliclyTraded Busir�essform:OCorporation 0]oinYVenture [jPartnershlp �SoleFroprletorship Parent company {if applicablej , John Swire & Sons Limlted Company's primary 6-digit North American Industry Classification System (NA[CSj Code: 493120 Is the praject a relotation af an existing facility to Denton from another locatlon? � Yes C1 No [f yes, gtve current f ocation: : N/A ; , PI.E,4SE CONIPLEi� �fExT TAB Desc,riptEnn �conomic Incent�ve Application ••o , e Please provide a brief description of the project in �enEon {activities to be perforrned, products to E�e produced, services ta be provided). 25a ward limit. `: United States Cold Storage, LP (USCS} is planning on building a 6 iTii�l�on cu;.ft. privafe refrigerated wa�ehouse (PRWj as ` customeC demands in the`north �"exas continue to 'increase. `This fa.cility wlll be in addition to the 4 facliities USCS curretiily ; oper�tes ln Fort Worth; Arlington and Dallas. The pertton f�ci►ity will! affer sYarage,;re-pack,`case p9ck; distributian and ..-. `: transpol'tation solutlons far produciion facilities fhrough the United:5tates and Mexico ; USCS Is`e9mmitted to usl,ng eco-friendly re{rigeration tech�6logy." Oiir o,�erall sustainabtlity goal is to be' Best in'Class" and . achie�e a 1.5 �ercent year over year reduction in energy usage. USCS'has decreased. g�eenhouse gas emIssions (GHG) eiiery,` year since 2005. 7his will be a modern buift facility wlth industry-leading safeguards for the enVironment We titirill contii�i�e .: to rasporislbly ma�age resources to:meet the evplving requirements of tF�e coriimuriities we serve, bu�customer;`employees' , `' and our..lndustry. `; ': Storage temperatures at this facility will range from -2� tq SOF, Prelimir�ary plans far:this facllity provide �or rai[ service, .. export:ser�ices; both cooler and freezer storage along with on-stte`customer offices: W. tth all new faciiities, United 5tates. Cofd Storage Is dedicated.to 6uilding Best in, Classfacil�ties. With �ort Wor#h.is 25+years.' ' old, palias-Halifax 30+ years and Ariingtan 30+ years, this, pro�es that USC5 not oniy butlds facilities; bUt is dedicated to maintaining and makingi�te necessary;lnvestrrients to keep thein Best in`Class '. Construction �nd Propei;ky Tax figures {New Constructian 1"ab) are only estimates b�.sed off.similiarfacilities USCoId has : recen#]y;built. There wiq i�e many'pff-s[te improvements dot�e bythe WestPark'�fRz.aEthough;USCS does not have detials '` regarding the amou�t/value of those Improvemer�is. List any additlonal factors to be considered for this praJect. please select all that apply. `"�� Occupies building �acant for at least 2 _;\t;`�`; years ��"��'"��'�< Project creates knowledge based, high- �'j�:,� skilled, or F�igh-payingjof�s �� Signlficant relationship with !��`�';��; universities _;� �: '`'''<�3;5='�> Improvemenis to �owntown .�3 International or national headquarters 25% of local contractors utilized or newjof�s filfed by €3enton residents "fargeted indus#ry sector Community support and involvement List any �ompany "green" or sustainable initiatives:. Pledse see:PYoject. Descrtption Will the company be seefcing LEED CerYificatlan? If yes, please provide ]evel of certification sought. '. .. PLEASECUMP�.ETENEXT`fAB Et�r�ploYrl�;er�t ;. O O O O - O C? O O O p O O : �' 1/j Vj N 1!t .Q 9 � .fl Q p O Q Wc W a t7p C � �--' � � H p .N � ac � LL � � � � .__3 � }.i � VI [j�' .X ,N SC a� o � 0. L f6 il1 � � � „Q � � � C � � Q Z � 0 0 ;� o �_ O 2' O i _ :O_ ? `LfY N. � .� m Q. � u a-� �o � .O O .� � i=+ 7 � O O L T [o Q � � C C f0 � N � � � u.l Eco,nomic fncen��r►e App�ication � SpLES TAX . �.,_�. .,, .,, �;: .,,.,. . , .��. .,.,. .: ..,.,... ,,,�:. ... . .. � ' � ��, . � . ,...;:_. �. .. � , „ .... . ... . ... : . . �� ., � 7his information is e�sed to estimate the fiscal impact. Please previde t�e current annual taxabfe sales (if applicable). $.0 Please �rovide the current annual Yaxable purchases. This data is �ased ta determine the economic impact af the construction periad. Please provide Yhe number of construction jobs anticipated. The following are used for the economic impact of aut-of-town visitors. Number of aut-of town visitors estimated in the first year. Average number of cEays each visitor wiEl stay in i]enton. ` $3,000,000: `104.00:. ' 100.00 `. 2.OD' Economic Incenti�e Application E�EcrR�c Estimated ANNUAL usage in kWh �stimated MONTHI.Y KW derrEancE Estimated Peak KW Capacity factor 9480300. 149$' �OS1500 (morith) � What types of power equipment will your facifity use? High HP Motors, `Refrigeration, Batiery Charging for Forklifts, Emergency Generators, Fire`Pum Please pro�ide the percent of the project's projected utility usage for manufacturing or processing operations (if applicabfe). NATURAL GAS WATER WASTEWATER �stimated ANNUAL usage in mcf Estimated MONTHLY mcf demand �stimated Peak m�f �stimated ANfVUAE. usage in gpd Estimated MONTHLY gpd demand Fstimated Peak gpd �stimated ANNUAI. usage in gpd Estimated MOf�TH gpd demand Estirnated peak gpd N/A. 0 0. 0. 8,671,200 gpY '. 722,000 gpm :;" 29,7Dpg gpd `: 6,9$3,�.00 gpy : 57.9;000 gp[rt ' 25,fl00 gpd. � • ► � � • �.,. ..,; ,NEWCOIVSTR�1�Ti0f�<PF20J�C1'INFORM�ITION , ' ` , . ,,.:; ,,. .F. _ ,,... ', ��.. �. .. �,:� ., . ,. . �.. �> > :,, ,.. �� Project type: �] Build to Suit ❑ Speculative ❑ dEher (please describe) Project use: ❑ Industrial ❑ Retail/Restaurant ❑ Office �] Warehouse/Distributian ❑ dther (please describe) Project size: Acreage: 40.Oa. <� 5q. Feet: 2�.58p3.00 Preferred siart date: 6/1/2028 ` Desired campletion date. 1J1/2.0.19.` . Current property value from Denton Central Appraisal �istrict* (pCAD): *Please attach a copy of the larest property tax statemeni(sJ from DCqD. What funds will be invested or Ie�eragecE forthe project? , � Provide the estimated valuation of the project. Describe any off-site infrastruciure requirements. " Westpa,rk TIRZ Water Westparlc TIRZ.: Wastewater � � �� ` We�tpark TIRZ 5treeYs . WestparkTlRZ Drainage Other ` W�stpark TIRZ: , ; PLEASE CUMPLETE �IEKT 7'AB Re�oc�t�oh �xpansion.:. ;.. . . � / 1 i i � ., RELOCATI0111 O� �XPAN$JON PROJ�Cr 1NFORMA'TIDN Project type: � guild to Suit ❑ Specufative ❑ Other (please describe) ProJect use: � Industrial ❑ Retail/Restaurant ❑ Off'rce ❑ Warehause/Distribution � Other (please descrihe) Project size: Acreage. `, Sq. Feet: Preferred start date: Desired completion date: Currer�t property �alue from Denton Central Appraisal Distrfct* (DCADj ; ,.. .. ,. *Please attach a copy of the latest property tax statement(sf from DCAD. What funds will be in�ested or leveraged forthe projec#7 impro�ements/ Structures Personal P�operty_:: " Engineering and Design �i�c uey�iup�ne[I� _; �ther lmpro�emer�ts ` 7otal.F I $0 $0 $� . ;, provide the estimatecE valuatlon of the proieci. �niprovements/ Structures `:: ; $0 $p ' ;$p _ _.-. ... Personal Praperty $0 $D $Q fnventol'Y ;' ` $0 ; ' ; $0 ;;:, '$0 Freeport �xemption $0 $0 $p 7ota[ $0 ` $Q :$P Describe any off-site lnfrastructure requirernents. Water Wastewater � SYreets, � Drainage �ther � Last page, applicat�on,cpmplete ,': „ � O V � � W N w � s u L c� � � _ � � �. 0 > a� � ,u � 0 0 u W s � 0 0 m a� .__ 0 � V e / � � o 0 M — O O � H�} c� C � O C L N � � y � � � � O � � � . c o- '�' O � L � � m � � � c L L 7 U C O V1 '� � �� a� x a� � L � � � U .i b.0 (d C (d � c� s � c c� J � M � d4 � � � O V"^�. O� q'� a �A p� � ..... ri °��°� �^» c� a��.. �� ^ M N — O M O� �p H�} H�} � d4 O O � � O O O � � O N H�} � H�} cd � H � C � O c L a� � � y � � � N L � O � � c o- '�' O � L J � m � � � c � � L U X •C � L O 7 N C � C � Q �c� � � � � ii�,, ii�,,. 0 0 +- o � N � M � � � � � O � M � � O � � � ao � � V Ef} N ff-} � X L cd C Y � — j� � t�i� � N � t �X ' � � > td � � � �, X > N O ,�` � � � (� U � � v�i .� �U'_' c � � � o 0 � � Y M � O (d � U M � V N C � M �L,, W N � � M N W C � � c � O � � C7ZQEf-}UD c O •�, . . . . . a � � � � Q ao 0 O� O � N � M d4 d4 M M � � N d4 o ao O � O �O O 00 M � H4 M O 0o O �i o d4 d4 M O M O 00 O �ri O N � d4 d4 M O M O 00 O �ri O N �O d4 d4 M O M O 00 O �ri O N 00 d4 d4 O O M O O M O O � N O �n M O N d4 d4 d4 N � � � C � N � � � a� � � � � C� c� +� � w N L w V o C = N U � 0 O O� � O� H4 O O� � O� H�} O O� � O� H4 O O� � O� H4 O O� � O� H4 O O� � O� H4 Z c O .� � N 6�4 N � cd > N Z a� � � — � � � � � O � � -° O � cd � � •0 '� � � � •N � C N � � O a � W cd � c c cd � � � N N � cd s � � O � � � N �C � � � C N N > O d .� �C � � � • • • - r �j � 'i � 'i City Hall City of Denton 215 E. McKinney St. Denton, Texas 76201 ��,� I�Illlll�uuuuuuu��ii www.cityofdenton.com ��'�� Legislation Text File #: ID 18-351, Version: 1 AGENDA CAPTION Receive a report, hold a discussion, and give staff direction regarding an incentive request from Fisher59. City of Denton Page 1 of 1 Printed on 3/2/2018 I7c��w[��>i[>[i hy I [��>r;i�tf�ar��nv� City of Denton _ . City Ha11 �� 5 215 E. McKinney Street tiY �� " Denton, Texas www. cityo fdenton. com DEPARTMENT: CM/ DCM/ ACM: DATE: AGENDA INFORMATION SHEET Economic Development Bryan Langley March 5, 2018 SUBJECT Receive a report, hold a discussion, and give staff direction regarding an incentive request from Fisher59. BACKGROUND Fisher59 distributes Mi1lerCoors beverage brands to 40 counties in North Texas and Southern Oklahoma. The family-owned and -operated company is headquartered in Denton, employs about 140 people locally, and does more than $120 million in business annually. The company was started by Clyde Fisher in Muenster in 1959, expanded to Wichita Falls in 1963 and Denton in 1983, and expanded into Oklahoma (Ardmore and Lawton) in 1985. The company's current site in Denton is at 2421 and 2419 I-35W North and consists of 85,000 square feet of warehouse and office space. PROJECT Fisher59 is seeking to expand by building a new 205,000-square-foot warehouse/distribution/office facility. The company will seek at least LEED Bronze certification of the new building, which will also incorporate a state-of-the-art crane system to manage inventory. Fisher59 estimates they will make a$31 million investment in the project, which will create approximately $16.9 million in new ad valorem value in Denton. By Year 10 of operations in the new facility, Fisher 59 expects to create 67 new jobs with an average salary of $50,922. Benefits are offered to full time employees. The company was considering a centrally located 50-acre site in Denton at US 380/Masch Branch and a less expensive site outside the Denton city limits at US 380/George Owens Rd. Following the Feb. 14 Economic Development Partnership Board meeting in which an incentive of $131,081 was recommended, the company closed on the Denton site. INCENTIVE POLICY AND REQUEST The 2016 Policy for Tax Abatement and Incentives states that businesses many be considered for a tax abatement of 25% if at least $5 million in investment/new value is met. The length of the abatement increases with higher investment/value, but may not exceed 10 years. The percentage of the abatement can increase in 5% increments for "additional factors" that make the proj ect more desirable. The policy also identifies targeted sectors for recruitment, and Fisher59 is not in a targeted sector. However, that does not disqualify the company from applying for an incentive. Fisher 59 requests the maximum allowable incentive under the current policy because the company is seeking to offset the higher costs of the Denton site. FISCAL INFORMATION Current Conditions La�dl Irr�p�rcavemen�ts � � ,�45,98� '�2,9'BC�,CN22 Business P'ers��ual Pr�ape�ty�` FF&E � II 3,7��1 Invent�ry �92J ,65'9 1+'eh�iefes arr�dl �there- '� 11,27�,5�b T�ta.l $�,�434',9�41 *Application lists $2, 500, 000; DCAD value of $2, 213, 954 used Project Ad Valorem Valuation and Revenue La�udl�` I mp rt �w✓ern�en�ts B+�siruess Pe�s+��ual Prr�+�Pe�t� l�c��al � �9,9 II 7,26'� $5,5�(�,�� '� II �+,'��i'8,4��+ `��",�� "�n ��,.� �� ,Ar�r�+�al tax �-�ev�e�+��e a�railabl�e f��- i�uce�utives �'�'��,� �� *Proposed new site has an agricultural exemption, market value used for new valuation * *Inventory excluded INCENTIVE ANALYSIS Staff analyzed the project with a 25% tax abatement model on the incremental value and a construction sales and use tax rebate model. The following analysis summary table uses these assumptions: • Gross annual City tax revenue: $107,787 • Annual City tax revenue available for abatement minus current generated tax revenue: $57,262 • Construction sales and use tax captured: $59,504 I�r�c�r�tiv�s �5� aba�enmer�� r� iir�crenmer��tall iir�crease �or�st. sa�es & �use ta�c rebate �ity IF��v�n��ui� I"�et taa� rever� �ue $I4,�I5 $5'�,5�4 $I4,�I5 $I4,�I5 $I4,�I5 $I4,�I5 $'7 I ,5'77 � �. � : RECOMMENDATION Because this project retains an existing business, is a headquarters facility, has an average salary for new jobs that is 12% higher than the Denton County average, will be a LEED certified construction project, and is not located in a TIRZ, staff recommended the following incentive: Construction sales and use tax rebate of $59,504 5-year, 25% abatement on incremental value of $71,577 The Economic Development Partnership Board concurred with staff's recommendation (7-0). STRATEGIC PLAN RELATIONSHIP The City of Denton's Strategic Plan is an action-oriented road map that will help the City achieve its vision. The foundation for the plan is the five long-term Key Focus Areas (KFA): Organizational Excellence; Public Infrastructure; Economic Development; Safe, Livable, and Family-Friendly Community; and Sustainability and Environmental Stewardship. While individual items may support multiple KFAs, this specific City Council agenda item contributes most directly to the following KFA and goal: Related Key Focus Area: Economic Development Related Goal: 3.4 Encourage development, redevelopment, recruitment, and retention EXHIBITS Exhibit 1— Agenda Information Sheet Exhibit 2 — Application Exhibit 3 — Presentation Respectfully submitted: Caroline Booth Director of Economic Development Economic Incentive Application City of Denton, Texas ,�'d•,•� '�"` ,,,,,,,, 1 Q�a� � ��_��r;:ir � ui ui�uu lum m uuuuuui puu� „m III II�III IIIIIIII III IIIIIIIII IIIIII IIIIII IIIIII III IIIIIIIIIII I�I��III I�I�IIII The City of Denton's Economic Development Department will use your responses to this application to prepare an economic impact analysis of your location or expansion project. Please enter the required information in the shaded cells or check boxes. If you have additional notes or information to include, insert rows or use Column K. Please attach any revelant maps, plats, metes and bounds, or renderings. Only complete applications will be considered. If you need assistance, call (940) 349-7776. Please email the completed questionnaire to Caroline.Booth@cityofdenton.com PLEASE COMPLETE PAGES (TABS) 1- 7 Today's date: 1/18/2018 Company contact inforn Name: Fisher59 Address: 2421 I-35 W North City, State, ZIP: Denton, TX 76207 Website: www.Fisher59.com Person submitting the questionnaire: Name: Steven Richer Title: CFO Email: steven.richer@Fisher59.com Person responsible for grant administration: Name: Steven Richer Title: CFO Email: steven.richer@fisher59.com Phone: 940-566-6717 Fax: Phone: 940-566-6717 Fax: Brief description of company's history including current operations: Started in 1959 by Clyde Fisher in Muenster, TX. In 1963 Clyde built his first warehouse at 305 N. Maple St., Meunster, TX and also purchased Wichita Beer Distributing in Wichita Falls, TX. When Denton became wet in 1983, he built his 3rd warehouse in Denton,TX to accomodate the need for more space to serve Denton. In July 1985, Clyde acquired the Miller Brewing COmpany distribution rights for Southern Oklahoma with the purchase of warehouses in Company ownership: ❑J Privately Held � Publicly Traded Business form: ❑r Corporation ❑ Joint Venture ❑ Partnership ❑ Sole Proprietorship Parent company (if applicable): Company's primary 6-digit North American Industry Classification System (NAICS) Code: 424810 Is the project a relocation of an existing facility to Denton from another location? 0 Yes ❑ No If yes, give current location: Current Headquarters at 2421 I-35W North, Denton, TX 76207 Economic Incentive Application Please provide a brief description of the project in Denton (activities to be performed, products to be produced, services to be provided). 250 word limit. Fisher59 is expanding its Denton, TX presence and capacity by building a new, 205,000 sqft warehouse and distribution facility. The new warehouse will incorporate green initiatives and a state-of-the-art crane system to manage inventory. The new facility will allow us to streamline our business and better serve our North Texas market as it continues to grow. List any additional factors to be considered for this project. Please select all that apply. ' Occupies building vacant for at least 2 years ' Project creates knowledge based, high i skilled, or high-paying jobs ', Significant relationship with + universities Improvements to Downtown ' X ' International or national headquarters ' X 25% of local contractors utilized or newjobs filled by Denton residents ' X Targeted industry sector ' X Community support and involvement List any company "green" or sustainable initiatives: Recycling of materials, Reuse of paper, Product Repacks Will the company be seeking LEED Certification? p Yes ❑ No If yes, please provide level of certification sought: Bronze at least, but Highest level practical i 0 +� c� U Q Q Q � � �+ i a� U i U .� 0 i 0 U W O O O O O O O O 00 O o0 00 N N � N .--I .--I N N m � � � � � 0 � � J J � LL l]U C a-� N X N w O N � � 7 Z � � 0 � � � � Q d GO C a-� N X N w O N � � 7 Z � � � � 0 0 ¢ c � � O .� � � 0 � J J 0 � } Q d N � C C Q �fl n 00 � N T +� U f0 Q f0 U ++ f0 N � O .� � a=� 7 w O w O ? ro a �o � c � � � v � � E � w Economic Incentive Application This information is used to estimate the fiscal impact. Please provide the current annual taxable sales (if applicable). $0 Please provide the current annual taxable purchases. $200,000 This data is used to determine the economic impact of the construction period. Please provide the number of construction jobs anticipated. 250.00 The following are used for the economic impact of out-of-town visitors. Number of out-of-town visitors estimated in the first year. 1500.00 Average number of Hotel room nights in Denton. 1.00 Economic Incentive Application ELECTRIC Estimated ANNUAL usage in kWh Estimated MONTHLY KW demand Estimated Peak KW Capacity factor What types of power equipment will your facility use? Please provide the percent of the project's projected utility usage for manufacturing or processing operations (if applicable). NATURAL GAS WATER WASTEWATER Estimated ANNUAL usage in mcf Estimated MONTHLY mcf demand Estimated Peak mcf Estimated ANNUAL usage in gpd Estimated MONTHLY gpd demand Estimated Peak gpd Estimated ANNUAL usage in gpd Estimated MONTH gpd demand Estimated Peak gpd Economic Incentive Application Project type: Project use: ❑ Build to Suit ❑ Speculative ❑ Industrial ❑ Retail/Restaurant ❑ Other (please describe) Project size: Acreage: Preferred start date: Desired completion date: Sq. Feet: � Other (please describe) ❑ Office ❑ Warehouse/Distribution Current property value from Denton Central Appraisal District* (DCAD): *Please attach a copy of the latest property tax statement(s) from DC,4D. What funds will be invested or leveraged for the project? Provide the estimated valuation of the project. Describe any off-site infrastructure requirements. Water Wastewater Streets Drainage Other Economic Incentive Application Project type: � Build to Suit ❑ Speculative � Other (please describe) Project use: ❑ Industrial ❑ Retail/Restaurant ❑ Office �] Warehouse/Distribution ❑ Other (please describe) Project size: Acreage: 50.00 Sq. Feet: Approx 205000 Preferred start date: 4/1/2018 Desired completion date: 6/30/2019 Current property value from Denton Central Appraisal District* (DCAD): *Please attach a copy of the latest property tax statement(s) from DC,4D. What funds will be invested or leveraged for the project? .� �� Improvements/ Structures $12,897,290 Personal Property $5,500,000 Engineering and Design $2,010,459 Site Development $6,176,537 Other Improvements $4,578,636 Total Project Costs $31,162,922 Provide the estimated valuation of the proiect. Improvements/ Structures Personal Property Inventory Freeport Exemption Total Describe anv off-site infrastructure reauirements. Water Wastewater Streets Drainage Other $2,980,022 $2,500,000 $4,000,000 $0 $9,480,022 2 PropertyTotal: $4,226,010 $9,917,268 $5,500,000 $2,000,000 $0 $17,417,268 $12,897,290 $8,000,000 $6,000,000 $0 $26,897,290 e / W N w � s u L c� � s � °o m a� _ ._ 0 � � V � � • w_ ,' � � C � � � 'a c c� c � � � i � � L O / � Q V � �O a � C O � � _ 0 U � c L L � U � � ' � � � Y � "�"" 1� �� „� � � � � ��a � p �°,» c � 4��.. ��. � ��. '� � � k a� v � aMo � o0 0 � - N O � v � ^ O 'L � o� �n � � c � � � � � v � y � v a� L N '� a � c 0 > "" 3 � i � � i y � V � � L � U � O � (d � � � i� cd .� � � O � �E � � � 7.) 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