From
Terry Jones
Title
Resolution authorizing implementation of a 9-year 75% partial tax abatement and Chapter 380 Agreement for Restoration Hardware, Inc., and partial tax abatement and a separated sales tax contract for W.R. Pioneer Parkway, LLC
Presenter
Bob O'Neal, Economic Development Director
Recommended Action
Approve
Analysis
RH is one of the fastest growing and most innovative luxury brands in the home furnishings marketplace. The RH brand stands alone and is redefining this highly fragmented and growing market. Restoration Hardware is positioned as a lifestyle brand and design authority, offering dominant assortments across a growing number of categories, including furniture, lighting, textiles, bathware, decor, outdoor and garden, as well as baby and child products.
Operating as a curator of the finest historical design the world has to offer, RH collections of timeless, updated classics and reproductions are presented consistently across sales channels in sophisticated and unique lifestyle settings that are on par with world-class interior designers. Their culture of innovation, superior product development capabilities, integrated multi-channel infrastructure and significant scale enables RH to offer an unmatched combination of design, quality and value.
As an incentive to locate their southwest distribution component in Grand Prairie, staff is recommending a 75% / 9 year partial tax abatement on the combined business personal property and real estate improvements, and enter into a separated contract to provide a partial sales tax rebate on construction materials purchased to complete a new 850,000 square foot regional distribution center. In addition, staff recommends entering into a Chapter 380 Agreement rebating 50% (of the 1% documented general sales tax revenue) on the first $50,000,000 of taxable internet sales and 75% (of the 1% documented general sales tax revenue) on taxable internet sales over $50,000,000.
Financial Consideration
Projected Investment - Real estate improvements: $22,000,000
Projected Investment - Business personal property: $10,000,000
Projected Investment - Taxable Inventory $50,000,000
Projected Investment - Internet Sales - $50,000,000+
Projected - Ad Valorem Tax Revenue: $550,000 (including inventory) per year
Projected - Ad Valorem Amount Abated: $161,000 a year
Body
A RESOLUTION OF THE CITY OF GRAND PRAIRIE, TEXAS, AUTHORIZING A NINE-YEAR/75% PARTIAL TAX ABATEMENT AND A CHAPTER 380 AGREEMENT WITH RESTORATION HARDWARE, INC. AND A NINE-YEAR, 75% PARTIAL TAX ABATEMENT AND A SEPARATED SALES TAX CONTRACT WITH W. R. PIONEER PARKWAY, LLC
WHEREAS, W.R. Pioneer Parkway, LLC desires to develop and build an 850,000 square foot light industrial build-to-suit facility for Restoration Hardware, Inc. to locate its southwest regional distribution operations; and
WHEREAS, the regional distribution facility will create a minimum of 10 jobs and necessitate a combined expenditure of at least $1,000,000 in business personal property and building improvements; and
WHEREAS, a partial ad valorem real estate tax abatement and partial construction sales tax rebate will induce W.R. Pioneer Parkway, LLC to construct an 850,000 square foot distribution center; and
WHEREAS, a partial business personal property tax abatement and Chapter 380 Agreement will induce Restoration Hardware, Inc. to locate its new regional distribution center within the city limits of Grand Prairie; and
WHEREAS, the City Council has determined that it is in the public interest to enter into Section 380 Agreement, Separated Sales Tax Contract, and execute a Partial Tax Abatement with W.R. Pioneer Parkway, LLC and Restoration Hardware, Inc.
NOW THEREFORE, BE IT RESOLVED, by the City Council of the City of GRAND PRAIRIE, Texas that:
SECTION 1. THAT a nine-year 75% partial tax abatement and a Chapter 380 Agreement with Restoration Hardware, Inc., and a nine-year, 75% partial tax abatement and a Separated Sales Tax Contract with W.R. Pioneer Parkway, LLC, are approved and the City Manager is hereby authorized to execute contracts.
PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF GRAND PRAIRIE, TEXAS, ON THIS THE 18TH DAY OF SEPTEMBER, 2012.