PRESENTER: Presenter
Jordan Matney, Deputy City Manager
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SUBJECT: Title
Discuss and consider the approval of a Chapter 380 Economic Development Agreement between the City of New Braunfels, Texas and Costco Wholesale Corporation in an amount up to $1.5 million of the City’s share of the sales tax generated from the Costco property over a term not to exceed 8 years.
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DEPARTMENT: Economic and Community Development
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COUNCIL DISTRICTS IMPACTED: N/A
BACKGROUND INFORMATION:
The existing sales tax sharing agreement between the City of New Braunfels and Mayfair provides for a 60/40 percent split for the project’s first five years and then a 50/50 percent split between the two entities in year 6 and beyond.
The proposed Chapter 380 agreement between the City and Costco would provide a rebate of 50% of the sales tax collected that is limited to the portion retained in the City’s general fund (1%) and does not include sales taxes retained for the purposes of Type B expenditures (.375%) or property tax relief (.125%).
The rebate is for an amount not to exceed $1.5 million, or eight years, whichever comes first. Costco must close on the property before the end of calendar year 2026 and ultimately complete at least a 150,000 square foot store, invest at least $25 million and operate for one day to be eligible for the sales taxes generated from the project.
ISSUE:
Sales tax sharing arrangement between the City and Costco
STRATEGIC PLAN REFERENCE:
☒Economic Mobility ☐Enhanced Connectivity ☐Community Identity
☐Organizational Excellence ☐Community Well-Being ☐N/A
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FISCAL IMPACT:
As mentioned above, the proposed 380 agreement allows for up to $1.5 million to be reimbursed to Costco as long as the performance conditions are met.
Recommendation
RECOMMENDATION:
Staff recommends approval of the Chapter 380 Agreement.