PRESENTER: Presenter
Jeff Jewell, Economic and Community Development Director
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SUBJECT: Title
Approval of a resolution recommended by the New Braunfels Economic Development Corporation of a second amendment to an existing economic development agreement with Texas Tito’s, Inc., supporting an expansion project to promote business enterprises that creates or retains primary jobs.
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DEPARTMENT: Economic and Community Development
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COUNCIL DISTRICTS IMPACTED: 4
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 manufacturing capacity with the construction and relocation to a larger facility in New Braunfels. The company purchased a 10-acre site on River Road and constructed a 26,000 square foot facility. 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 approved, 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 did not fulfill the requirements of the agreement in its first-year audit because the project did not officially break ground for construction until June of 2023. The NBEDC approved a one-year extension to the occupancy requirement to begin on June 30, 2024. The City Council approved the one-year extension at its August 14, 2023 meeting.
The first amendment to the agreement required Texas Tito’s to be in operation at their new facility by June 30, 2024. Unfortunately, federal permitting complications due to a floodplain revision extended the anticipated date for occupancy and operations to commence, and the City issued Texas Tito’s its Certificate of Occupancy in October 2024 after receiving approval from FEMA. Therefore, staff is requesting the contract and associated obligations reflect a six-month extension due to the matter being out of the company’s control and not due to any lack of diligence on its part.
The New Braunfels Economic Development Corporation voted to approve this extension at its March 13, 2025 regular meeting.
ISSUE:
Approval of this item will shift the facility occupancy, job reporting requirements, and the contract end date for this existing economic development agreement an additional six months.
STRATEGIC PLAN REFERENCE:
☒Economic Mobility ☐Enhanced Connectivity ☐Community Identity
☐Organizational Excellence ☐Community Well-Being ☐N/A
FISCAL IMPACT:
No additional fiscal impacts exist to extending the economic development agreement; the initial incentive of $550,000 remains in place.
Recommendation
RECOMMENDATION:
Staff recommends approval of the six-month extension.