PRESENTER: Presenter
Jeff Jewell, Economic and Community Development Director
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SUBJECT: Title
Discussion and possible action approving a resolution nominating Lefko USA, Inc for designation as an Enterprise Zone Project under the State of Texas Enterprise Zone Program under the Texas Enterprise Zone Act, Chapter 2303, Texas Government Code
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DEPARTMENT: Economic and Community Development
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COUNCIL DISTRICTS IMPACTED: 4
BACKGROUND INFORMATION:
Lefko wishes to submit application to the State of Texas for designation as an enterprise project.
The Texas Enterprise Zone Program, established under Chapter 2303 of the Texas Government Code, is a state-level economic development tool that allows municipalities to nominate qualified businesses for designation as “Enterprise Projects.” Once designated, these businesses are eligible to receive state sales and use tax refunds based on their qualified capital investment and job creation or retention commitments. The program is designed to encourage private-sector investment that directly supports community economic development priorities. Incentives are performance-based, meaning companies must demonstrate tangible results-such as new capital expenditures, workforce expansion, and the retention of local jobs-before benefits are realized. The program also places emphasis on hiring practices that expand opportunities for economically disadvantaged individuals, ensuring that the benefits of growth extend broadly within the community. In practice, the Enterprise Zone Program provides a competitive advantage for Texas cities seeking to retain and grow existing employers while attracting new capital investment.
Lefko, a Canadian manufacturing company, has expressed interest in expanding to New Braunfels as noted in the previous agenda item. The expanded location would be a new custom blow-molded plastic parts, components, and products manufacturing facility to serve customers in Mexico and Southern United States. The company has existing customers in these markets in which it currently serves from its location in Canada. Lefko plans to invest more than $10 million into its New Braunfels facility. By 2030, this investment will include business personal property, machinery and equipment, and tenant improvements - with plans to employ at least 50 full time employees with an average payroll of $62,000 per employee.
If awarded the Enterprise Zone status, Lefko must meet certain hiring requirements. Since it is not physically located in a state-designated enterprise zone, state statute requires that at least 25% of the new jobs or retained jobs associated with the project be filled by individuals who are either:
1. Economically Disadvantaged Persons - defined by the state to include individuals who meet criteria such as being unemployed, underemployed, low-income, or receiving certain types of public assistance.
2. Residents of an Enterprise Zone - even if the business itself is located outside of a zone, the company can meet its requirement by hiring employees who live within a designated enterprise zone anywhere in the state.
This provision ensures that the state-level incentive provides broad community benefit, not just support for the company’s balance sheet. By tying eligibility to workforce opportunities for disadvantaged or zone-resident individuals, the program channels the impact of private-sector investment into populations that the legislature intended to assist. Veterans are classified as “economically disadvantaged individuals” for the purposes of meeting the 25% threshold. Conversations with the company have indicated its commitment especially to meeting the hiring standards of the program, especially as it relates to veteran employment. This means that Lefko can satisfy part (or all) of its hiring requirement through the recruitment or retention of veterans.
By leveraging a state-level incentive that is tied directly to job creation and investment outcomes, New Braunfels can strengthen its economic base with the recruitment of Lefko without requiring additional local incentives beyond what is proposed by the NBEDC.
STRATEGIC PLAN REFERENCE:
☒Economic Mobility ☐Enhanced Connectivity ☐Community Identity
☐Organizational Excellence ☐Community Well-Being ☐N/A
FISCAL IMPACT:
N/A
Recommendation
RECOMMENDATION:
Staff recommends approval of a resolution nominating Lefko USA, Ltd. for designation as an Enterprise Zone Project under the State of Texas Enterprise Zone Program.