CC MEETING: June 25, 2024
DATE: June 18, 2024
TO: Erin Rinehart, City Manager
FROM: Robert Winningham, Director of Economic Development
Marc Guy, Assistant City Manager
Title
Consider A Resolution Repealing And Replacing Resolution No. 4787 And Authorizing The City Manager To Negotiate And Execute An Economic Development Incentive Agreement With DuraPlas LC To Change The Date Of Commencement Of Improvements To Real Property At 2395 Midway Road As Such Date Was Established By Resolution No. 4787 And To Change The Name Of The Company On The Agreement From DuraPlas, Inc. To DuraPlas LC, And Further Establishing A Program Of Tax Rebate Grants To The Company For The Relocation Of Its Headquarters And Manufacturing Operations To 2395 Midway Road, In Amounts Equal To Fifty Percent (50%) Of Taxes Paid To The City On The Assessed New Value Of Business Personal Property For A Maximum Term Of Three (3) Years, And A Second Grant In Amounts Equal To Fifty Percent (50%) Of Taxes Paid To The City On The Assessed New Value Of Business Personal Property And Real Property For A Maximum Term Of Three (3) Years After Issuance Of A Certificate Of Occupancy On A New Building To Be Constructed, For A Total Incentive Amount Not To Exceed $481,284.00.
Body
BACKGROUND:
On December 5, 2023, City Council approved Resolution No. 4787 to execute an economic development incentive agreement with DuraPlas. Since that time, the company has requested an extension of the commencement date of improvements to real property on the site from June 24, 2027, to not later than June 24, 2031, and to change the name of the company on the agreement from DuraPlas, Inc. to DuraPlas LC. All other aspects of the terms of the incentive agreement established by Resolution No. 4787 remain unchanged.
This agenda item is to consider repealing Resolution No. 4787 and approving a new resolution authorizing the City Manager to execute an economic development incentive agreement that incorporates the changes requested by DuraPlas.
DuraPlas is a manufacturer of plastic products used primarily in the agriculture sector. The company is considering relocating its headquarters and manufacturing operations to 2395 Midway Road in Carrollton.
The company will acquire and redevelop the property, and remove existing structures valued at approximately $23.4 million. During the first three (3) years of site planning and demolition, the company will use a portion of the property to store approximately $3 million in business personal property.
DuraPlas will begin construction no later than June 24, 2031, of at least 650,000 square feet of office, manufacturing and warehouse space, adding new product lines that would require the installation of new machinery with an approximate value of $50.5 million, plus approximately $40 million in improvements to the property. Additionally, the company plans to create 304 full-time jobs with an average annual salary of $50,680, plus benefits, over the first ten years of operation.
FINANCIAL IMPLICATIONS:
Staff recommends establishing a program of rebate grants to the company in amounts equal to fifty percent (50%) of taxes paid to the City on the assessed new value of business personal property for a maximum term of three (3) years, and a second grant in amounts equal to fifty percent (50%) of taxes paid to the City on the assessed new value of business personal property and real property for a maximum term of three (3) years after issuance of a Certificate of Occupancy on a new building to be constructed, for a total incentive amount not to exceed $481,284.00.
IMPACT ON COMMUNITY SUSTAINABILITY:
Should DuraPlas choose to relocate its headquarters to 2395 Midway Road, the company will create new jobs and increase the net ad valorem value of the property by constructing a new headquarters and manufacturing building.
STAFF RECOMMENDATION/ACTION DESIRED:
Staff recommends City Council approval of a resolution repealing Resolution No. 4787 and approving a new resolution authorizing the City Manager to execute an economic development incentive agreement that incorporates the changes requested by DuraPlas.