PRESENTER: Presenter
Jeff Jewell, Economic and Community Development Director
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SUBJECT: Title
Discussion and possible approval of a second amendment to the existing Texas Tito’s NBEDC Economic Development Agreement
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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 expanded 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.
ISSUE:
The approved economic development project shifts occupancy and job reporting requirements (and the contract end) for 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 for extending the economic development agreement; the initial incentive of $550,000 remains in place.
Recommendation
RECOMMENDATION:
Staff recommends approval of an additional six-month extension in the form of an amendment to the contract.