PRESENTER: Presenter
Jeff Jewell, Economic and Community Development Director
Body
SUBJECT: Title
Approval of a resolution recommended by the New Braunfels Economic Development Corporation for a one-year extension to an existing economic development incentive agreement with Texas Tito’s, Inc., which supports an expansion project to promote business enterprises that create or retain primary jobs; and declaring an effective date.
Header
DEPARTMENT: Economic and Community Development
BACKGROUND INFORMATION:
In April 2022, the NBEDC approved a project expenditure of up to $550,000 to Texas Tito’s for a building expansion project that would help grow the business to retain and create primary jobs. The company is in the process of expanding their footprint by relocating to a larger facility in New Braunfels. A 10-acre site on River Road has been purchased and plans are underway to construct a 26,000 square foot facility with an anticipated ad valorem value of $3M. The initial incentive agreement in 2022 aimed to assist the company with the construction of a new waterline to serve the site. The waterline extension will provide necessary infrastructure for future development along River Road.
The initial incentive agreement listed required benchmarks Texas Tito’s should meet by June 2023. At the time the agreement was being considered, it was thought that permits were close to being issued but the project continued to encounter engineering and planning related issues that needed more time to resolve. Due to these delays, Texas Tito’s would not be ready to meet the requirements of the agreement in its first-year audit because the project did not officially break ground for construction until June of 2023. An extension of one-year to the existing economic development agreement has been requested.
The NBEDC approved the one-year extension at its July 20, 2023 regular meeting.
ISSUE:
The approved existing economic development incentive project requires an additional year added to the agreement due to the project’s delay.
FISCAL IMPACT:
There are no additional fiscal impacts for extending the economic development incentive agreement by one year; the initial incentive of $550,000 remains and the Company still has plans to expand their business, retain jobs, and create additional jobs in the years to come. The company has met its initial requirements of providing a letter of credit in exchange for the funds for installation of the water line.
Recommendation
RECOMMENDATION:
Staff recommends approval of a one-year extension to the existing incentive agreement.