From
Letecia McClendon
Title
Resolution granting 380 Incentive Agreement with CardinalHealth; granting a five-year 50% rebate on sales tax revenues
Presenter
Marty Wieder, Economic Development Director
Recommended Action
Approve
Analysis
CardinalHealth provides medical products to over 75 percent of hospitals in the United States. Based in Dublin, Ohio, CardinalHealth ranks among the Fortune 100 Top 25 (#21). The company is traded on the New York Stock Exchange as CAH.
CardinalHealth was originally known as Baxter Healthcare here in Grand Prairie before it acquired Baxter division Allegiance Healthcare; it has operated in 361,690 square feet at 3080 West IH-20 (the northeast corner of IH-20 and SH 360) since 1996--and presently employs 249 people.
The company has been considering relocation and expansion within North Texas, as well as to a location outside the State; CardinalHealth real estate representatives are seeking a lease extension from the owners of 3080 West IH-20, and they have an option to eventually expand the building footprint. The building owners will make more than $3 million in real estate improvements in conjunction with the lease renewal. Moreover, CardinalHealth officials are weighing the use of a second-story mezzanine at 3080 West IH-20 for other office uses--some of which may qualify as an in-bound or on-line sales call center (with the potential for revenues that may also qualify as sales taxable).
Therefore, as an incentive for CardinalHealth to remain in Grand Prairie and eventually expand operations staff is recommending a five-year sharing of 50% of CardinalHealth's $.01 General Fund on-line sales tax revenues, as allowed through Chapter 380 of the Texas Local Government Code.
Financial Consideration
Present Investment - Equipment, Machinery & Fixtures: $2,200,000
Present Inventory: $52,600,000
Added Investment - Real estate improvements: $3,000,000
Projected Future Investment - Added Real Property Market Value: $5,200...
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