PRESENTER: Presenter
Jeff Jewell, Economic and Community Development Director
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SUBJECT: Title
Approval of the Second Amendment to the Chapter 380 Economic Development Agreement between the City of New Braunfels and Continental Autonomous Mobility US, LLC. (Aumovio).
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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.
To incentivize the initial project, the City of New Braunfels entered into a Chapter 380 Economic Development Agreement with CAM in August 2020 which provided multi-year refund of property taxes paid on the improvements and business personal property for the company fulfilling certain employment and wage requirements. Due to challenges of the Covid pandemic, the Agreement was amended in December 2020 and all requirements were extended one additional year.
The New Braunfels Continental location is competing for an expansion project which would require an additional 65,000 square feet of manufacturing space, would employ an additional 100 jobs, and add an additional $100M of appraised value to the site. To encourage the expansion project, the City of New Braunfels is considering a 10-year tax abatement in which 65% of the property value would be abated each year.
Both the City and Continental desire to consolidate the initial incentive structure of the 380 Economic Development Agreement into the proposed tax abatement; to do so, a Second Amendment is being needed to truncate the existing agreement. The action would consolidate the original Chapter 380 Agreement into a new tax abatement agreement that will go into effect once the expansion project is completed.
ISSUE:
Approval of a Second Amendment to consolidate the initial incentive structure of the 380 Economic Development Agreement into a Chapter 312 tax abatement.
STRATEGIC PLAN REFERENCE:
☒Economic Mobility ☐Enhanced Connectivity ☐Community Identity
☐Organizational Excellence ☐Community Well-Being ☐N/A
FISCAL IMPACT:
No fiscal impact to truncating the Chapter 380 Agreement into a tax abatement agreement.
Recommendation
RECOMMENDATION:
Staff recommends approval of the Second Amendment to the 380 Economic Development Agreement.