From
Letecia McClendon
Title
Resolution granting 380 Incentive Agreement with The Coca-Cola Company granting a 50% rebate on ad valorem real estate improvements and tangible personal property improvements for seven years, and enter into a separated sales tax contract
Presenter
Marty Wieder, Director of Economic Development
Recommended Action
Approve
Analysis
The Coca-Cola Company, headquartered in Atlanta, currently has a 160,455 S.F. Dasani bottled water manufacturing facility in Grand Prairie, which produced and sold over 21 million cases in 2016. In 2007, Coca-Cola acquired Energy Brands (d/b/a Glacéau), which manufactures and distributes various lines of enhanced water including the Vitaminwater Line. Economic Development staff began negotiations with The Coca-Cola Company Corporate Atlanta office in December 2016 to locate its new Vitaminwater line in Grand Prairie. In January, CCC reduced its focus to 3 sites (California, Pennsylvania, and Grand Prairie) and requested incentive options from each city.
As an incentive to locate its new Vitaminwater manufacturing and distribution line in Grand Prairie, staff is recommending a seven-year, 50% property tax rebate on the added value of real estate and equipment, and entering into a Separated Sales Contract rebating 50% of the 1% document sales tax revenue generated from construction materials and purchase of taxable equipment (such as conveyors and process piping).
The proposed incentive package was reviewed by the Finance & Government Committee and is forwarded to the Council with a favorable recommendation.
Financial Consideration
Projected Investment -- Added Real Estate improvements: $6,000,000
Projected Investment -- Added Equipment: $27,000,000
Projected Investment -- Added Sales Tax Revenue: $172,000
Projected -- Real Ad Valorem Amount Rebated: $20,000 per year ($140,000 over 7 years)
Projected -- Equipment Ad Valorem Amount Rebated: $90,000 per year ($630,000 over 7 years)
Projected -- Sales Tax Amount Rebated: $43,000 (one time rebate)
Body
A RESOLUTION OF THE CITY OF GRAND PRAIRIE, TEXAS, TO ENTER INTO A CHAPTER 380 PROGRAM AGREEMENT FOR ECONOMIC DEVELOPMENT INCENTIVES WITH THE COCA-COLA COMPANY GRANTING A REBATE
Whereas, The Coca-Cola Company is considering adding a new Vitaminwater manufacturing line to its current 160,455 S.F. Dasani bottled water manufacturing facility at 3405 Roy Orr Boulevard in Grand Prairie; and
Whereas, the new bottled water line will add an additional 25,000 S.F. of manufacturing space to its Grand Prairie plant, along with new manufacturing equipment, and will create a minimum expenditure of at least $1,000,000 in new building and manufacturing improvements; and
Whereas, a seven-year, 50% property tax rebate on the added value of real estate and equipment, and a 50% rebate of the 1% documented sales tax revenue generated from construction materials and purchase of taxable equipment will induce The Coca-Cola Company to locate its new manufacturing line in Grand Prairie; and
Whereas, the City Council has determined that it is in the public interest to enter into a Chapter 380 Program Agreement for Economic Development Incentives and partially rebate certain sales tax revenue, ad valorem real estate and business property taxes.
NOW THEREFORE, BE IT RESOLVED, by the City Council of the City of GRAND PRAIRIE, Texas that:
Section 1. THAT the granting of an incentive through a Chapter 380 incentive agreement is approved and the City Manager is hereby authorized to execute contracts to effectuate this approval.
PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF GRAND PRAIRIE, TEXAS, ON THIS THE 7TH DAY OF MARCH, 2017.