From
Letecia McClendon
Title
Resolution granting 380 Incentive Agreement with CardinalHealth; granting a partial rebate on sales tax revenues
Presenter
Marty Wieder, Economic Development Director
Recommended Action
Approve
Analysis
On March 21, 2017, City Council voted to grant a 380 Incentive Agreement to CardinalHealth, a long-time Grand Prairie employer which has been considering relocation and expansion within North Texas as well as outside the State, with a combination of sales and ad valorem tax rebates. CardinalHealth however leases the 361,690 square feet at 3080 West IH-20 - and therefore cannot quality for rebate of ad valorem taxes. So as an incentive for CardinalHealth to remain in Grand Prairie and eventually expand operations, staff is again recommending a five-year sharing of 50% of CardinalHealth’s qualifying $.01 General Fund sales tax revenues, as allowed through Chapter 380 of the Texas Local Government Code.
Moreover, the company continues to pursue new contracts and weigh the use of a second-story mezzanine at 3080 West IH-20 for uses which may also qualify as sales taxable. CardinalHealth officials have requested consideration of an additional percentage share of qualifying revenues to come as a result of their lease extension, space repurposing and possible future expansion.
Therefore, staff is recommending an additional five-year sharing of 25% of CardinalHealth’s $.01 General Fund sales above $62 million. If approved by City Council, all incentive rebates will apply to sales tax revenues reported and paid by CardinalHealth on or after January 1, 2018.
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: $5,200,000
Projected - Sales Tax Amount Received: $6,834,200 (over 5 years)
Projected - Sales Tax Amount Rebated: $1,708,550 (...
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