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 approving a Second Amendment to the contract with Continental Autonomous Mobility US, LLC., to modify the employment condition, eliminate the “two-year rolling average” methodology, and provide alternate methods for measuring compliance.
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DEPARTMENT: Economic and Community Development
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COUNCIL DISTRICTS IMPACTED: 4
BACKGROUND INFORMATION:
Continental Autonomous Mobility US, LLC (formerly Continental Automotive Systems, Inc.), herein referred to as “CAM”, develops pioneering technologies and services for sustainable and connected mobility of people and their goods. Founded in 1871, the technology company offers safe, efficient, intelligent, and affordable solutions for vehicles, machines, traffic, and transportation.
Continental opened its 215,000 square-foot New Braunfels manufacturing location in Fall 2022 after an initial investment of $110M and actively provides employment opportunities for up to 450 employees.
The New Braunfels Economic Development Corporation (NBEDC) supported this business relocation and entered into an economic development agreement with the company in July 2020. The NBEDC provided $4.7M of incentives to support this large-scale project - which significantly expanded CAM’s business enterprises. These incentives included: a land acquisition grant (NTE $3.3M), costs associated with the NBU sewer line extension to the project site (NTE $1.8M), and City building permit and Roadway Impact Fee reimbursements (NTE $270K). In exchange for the incentives, Continental agreed to meet/exceed employment and wage conditions on an annual basis.
The First Amendment to the agreement was executed in December 2020 and extended the deadlines for commencement of construction, operations, employment conditions, and wage condition schedules by one year - caused by the challenges of the Covid pandemic.
The Second Amendment is proposed to recognize the Company’s revision to employment targets due to disruptions the Covid-19 pandemic precipitated. The pandemic caused significant disruptions in the automotive industry that resulted in many Original Equipment Manufacturers (OEMs) delaying or altering development cycles that Continental relies on for meeting production targets. These delays in technology adoptions slid production and hiring targets. Additionally, the Company faced challenges in finding sufficient, qualified staffing in 2022 when the facility opened and implemented additional automations to reduce overall headcount needs. While those changes drove average wages up, it resulted in a reduction of the overall headcount. Finally, the Company has seasonality in product demand and the subsequent hiring needs. While the Company had more than 438 employees at the facility, on average, through 2024, the agreement required the city to conduct employment compliance checks in December when employment is at its lowest. This resulted in the Company not meeting the employment minimums even though it exceeded minimum payroll and investment thresholds. Considering the fulfillment of payroll and investment significantly beyond minimums as outlined in the original 2019 agreement, the NBEDC board recommended the contract be modified to reduce the minimum employment levels in 2024-2027, whereafter the Company plans to meet the originally planned employment thresholds.
As proposed, the Second Amendment:
• Revises schedule of minimum average numbers of Qualified Employees required for the Employment Condition to:
|
Revised Schedule for FTEs |
|
|
Calendar Year |
Minimum FTEs |
Previous Minimum |
|
2024 |
365 |
444 |
|
2025 |
365 |
444 |
|
2026 |
406 |
444 |
|
2027 |
555 |
576 |
|
2028 |
576 |
576 |
|
2029 |
576 |
576 |
|
2030 |
576 |
576 |
|
2031 |
576 |
576 |
|
2032 |
576 |
576 |
• Eliminates the “two-year rolling average” methodology for aggregating employee counts
The two-year rolling average methodology required an average of employment at the facility on December 31 in one year and the year prior. This change would eliminate that methodology.
• Provides alternate methods for measuring compliance within the Employment Condition for any given calendar year
This provision allows the Company to fulfill the contract’s employment conditions by electing to provide the number of qualified employees at the facility on September 15th of a given year or to utilize the average number of employees on the last day of each month during the applicable calendar year.
This item was approved by the New Braunfels Economic Development Corporation at its September 30, 2025 meeting.
ISSUE:
Continental is requesting a modification to the employment condition in the existing economic development contract. The new employment conditions would modify the full-time job requirements for 2024-2027, eliminate the “two-year rolling average”, and provide alternate methods for measuring compliance.
STRATEGIC PLAN REFERENCE:
☒Economic Mobility ☐Enhanced Connectivity ☐Community Identity
☐Organizational Excellence ☐Community Well-Being ☐N/A
FISCAL IMPACT:
There is no fiscal impact for approving the Second Amendment.
Recommendation
RECOMMENDATION:
Staff recommends approval of the Second Amendment to the contract with Continental Autonomous Mobility US, LLC.