Presenter/Contact
Presenter
Victor Garza, Economic Development Manager
Contact Info
(830) 221-4621 - vgarza@nbtexas.org
Subject Header
SUBJECT:
Title
Discuss and consider approval of a resolution recommended by the New Braunfels Industrial Development Corporation authorizing an expenditure of up to $183,000 to TaskUs Inc. for a project to create 450 new jobs.
Body
BACKGROUND / RATIONALE:
TASKUS is a business solutions company targeting innovative start-up companies. They offer customer support and back office operations for some of the leading tech brands. The company is considering a technical operations and customer experience center in New Braunfels. The company will spend $5.4 million for leasehold improvements and $5.0 million for computer and telecommunications equipment. The company expects to create 450 new jobs in New Braunfels with an average wage of $31,000 calculated with benefits, with 225 of these new jobs paying $15.30/hour and 225 paying $14.90/hour. After a public hearing February 9, 2018, the NBIDC approved a $183,000 financial incentive by a vote of 5-0.
Proposed Incentives- State of Texas and Comal County
Comal County will be considering a Chapter 381 to provide property tax credits for an 8-year period at an average of fifty four percent.
Proposed Local Incentives- Chapter 380 Agreement & NBIDC Grant
For the NBIDC and City Council to consider this project, New Braunfels had to compete against multiple sites and municipalities in Texas and other states. The proposed incentive package, coupled with community and site attributes, ultimately influenced TaskUs to select New Braunfels as the finalist site. To finalize negotiations, staff is proposing an incentive package that includes a Chapter 380 Agreement and a grant from the NBIDC. The Chapter 380 would provide an annual grant that is calculated according to percentage of total city property taxes paid on land, improvements and machinery and equipment once certain investment and job creation thresholds are fulfilled and maintained. It is proposed that the Company would be eligible to receive the grant according to a fixed schedule and percentages once thresholds are met. The following table illustrates the period and grant percentage the company would be eligible to receive:
Investment Levels
|
First Year Taxable |
Total Taxable Assessed Value (2018 dollars) |
Rebate Year |
Rebate Percentage |
Taxes Owed |
Rebate Amount |
|
2018 |
$6,321,000 |
2019 |
70% |
$ 30,859.12 |
$ 21,601.39 |
|
2019 |
$6,738,000 |
2020 |
70% |
$ 32,894.92 |
$ 23,026.44 |
|
2020 |
$7,004,160 |
2021 |
70% |
$ 34,194.31 |
$ 23,936.02 |
|
2021 |
$8,037,523 |
2022 |
55% |
$ 39,239.19 |
$ 21,581.55 |
|
2022 |
$8,461,134 |
2023 |
55% |
$ 41,307.26 |
$ 22,718.99 |
|
2023 |
$8,734,036 |
2024 |
55% |
$ 42,639.56 |
$ 23,451.76 |
|
2024 |
$9,774,277 |
2025 |
30% |
$ 47,718.02 |
$ 14,315.41 |
|
2025 |
$10,204,903 |
2026 |
30% |
$ 49,820.34 |
$ 14,946.10 |
|
2026 |
$10,484,961 |
2027 |
0% |
$ 51,187.58 |
$ - |
|
2027 |
$11,532,500 |
2028 |
0% |
$ 56,301.67 |
$ - |
|
Total: |
$ 426,161.96 |
$ 165,577.65 |
Required Employment
The Company will add 450 new employees over the lifetime of the agreement. There will be a handful of employees relocating from other facilities but the overwhelming majority will be hired from our local area. In exchange for the $183,000 Grant. Company has agreed to an average wage of $15.30 for 225 of the employees.
Clawbacks
This agreement will be secured by a Letter of Credit in the amount of the grant. Should company fail to maintain the employment numbers we would seek reimbursement.
Addresses a Need/Issue In a City Plan or Council Priority:
NBIDC Funding Guidelines Section IV:
Grants from NBIDC have typically been in a range of $2,000 to $7,000 per new job created. NBIDC has provided greater incentives in circumstances when companies move or increase headquarter operations in or to New Braunfels, offer highly paid positions for skilled employees, or introduce a new skill-set opportunity with high pay/benefits to our labor market. As a general rule, the amount of incentive dollars should not exceed 50% of the total project cost. An economic impact analysis and financial analysis is required of any request for funding, and the NBIDC Board of Directors maintains the discretion to adjust the level of incentive accordingly
And Section V:
Projects that meet the NAICS codes and provide “primary” jobs, should also meet the minimum job creation and investment thresholds established by NBIDC. They are the creation of at least 5 new fulltime jobs at or above the average county wage and new infrastructure investment of at least $125,000. NBIDC members may waive one or both of these thresholds when designing a performance-based incentive that is expected to be paid out at some future date when the thresholds are met. NBIDC may also waive these thresholds in the case of job retention projects, or when the assistance of NBIDC would help fund a new equipment purchase for a company that would increase their productivity and their competitiveness in the marketplace.
Fiscal Impact:
See Attached EIA One Page Summary
Board/Commission Recommendation:
NBIDC Approved the Grant 5-0.
Staff Recommendation:
Staff believes the Agreement is consistent with the NBIDC Funding Guidelines and recommends approval.
Attachment:
One Page EIA
Draft Resolution
Proposed Term Sheet