The URL can be used to link to this page

Home My WebLink AboutPR 14243:TOTAL ENTERPRISE PROJ.INTEROFFICE MEMORANDUM TO:. FROM: SUBJECT: DATE: STEVE FITZGIBBONS, CITY MANAGER DALE L. WATSON, DIRECTOR OF PLANNING ~ P.R. NO. 14243 - ENTEm'mSE PROJECT (TOTAL) 07/10/07 RECOMMENDATION: TOTAL has requested designation as a qualified business and a triple jumbo enterprise project under the Texas Enterprise Zone Program. BACKGROUND: A description of the Texas Entexprise Zone Program follows: Program Objective The Texas Enterprise Zone Program is an economic development tool for local communities to partner with the State of Texas to promote job creation and capital investment in economically distressed areas of the state. Participation Local communities must nominate a company as an Enterprise Project to be eligible to participate in the Enterprise Zone Program. Legislation limits allocations to the state and local communities per biennium. The state accepts applications quarterly with deadlines on the first working day of March, June, September and December. Benefits to Participation Designated projects are eligible to apply for state sales and use tax refunds on qualified expenditures. The level and amount of refund is related to the capital inveslment and jobs created at the qualified business site. Level of Capital Investment Maximum number of jobs Maximum potential refund Maximum refund per Job allocated $40,000 to $399,999 10 $25,000 $2,500 $400,000 to 25 $62,500 $2,500 $999,999 $1,000,000to 125 $312,500 $2,500 $4,999,999 $5,000,000 to 500 $1,250,000 $2,500 $149,999,999 Double 3umbo Project $150,000,000 to $249,999,999 500 $2,500,000 $5,000 Triple 3umbo Project $250,000,000 or more 500 $3,750,000 $7,500 In addition, local communities must offer incentives to participants under thc enterprise zone program, such as tax abatement, tax increment financin~ and one-stop permitting. Participation Requirements Communities may nominate projects, for a designation period up to five years, non-inclusive of a 90-day window prior to the application deadline. Employment and capital investment commitments must be incurred and met within this timeframe. Projects may be physically located in or outside of an Enterprise Zone. If located within a zone, the company commits that at least 25% of their new employees will meet economically disadvantaged or enterprise zone residence requirements. If located outside of a zone, the company commits that at least 35% of their new employees will meet economically disadvantaged or enterprise zone residency requirements. 2 Under limited statutory provisions, an enterprise project designation may be granted for job retention. BUDGETARY/FISCAL EFFECT: Provides a potential state sales tax refund of $3,750,000 to TOTAL. STAFFING/EMPLOYEE EFFECT: None SUMMARY: Proposed Resolution No. 14243 would grant TOTAL designation as a qualified business and a triple jumbo enterprise project. P.R. NO. 14243 DLW 7/10/07 RESOLUTION NO. NOMINATING TOTAL PETROCHEMICALS USA, INC. TO THE OFFICE OF THE GOVERNOR ECONOMIC DEVELOPMENT AND TOURISM ("OOGEDT') THROUGH THE ECONOMIC DEVELOPMENT BANK ("BANK") FOR DESIGNATION AS A QUALIFIED BUSINESS AND A TRIPLE JUMBO ENTERPRISE PROJECT ("PROJECT") UNDER THE TEXAS ENTERPRISE ZONE PROGRAM UNDER THE TEXAS ENTERPRISE ZONE ACT, CHAPTER 2303, TEXAS GOVERNMENT CODE ("ACT"). WHEREAS, the City of Port Arthur ("City") on November 18, 2005, passed Ordinance No. 05-86 electing to participate in the Texas Enterprise Zone Program, and the local incentives offered under this resolution are substantially the same on this date as were outlined in Ordinance No. 05-86; and, WHEREAS, the Office of the Governor Economic Development and Tourism ("OOGEDT') through the Economic Development Bank ("Bank") will consider the project proposed by TOTAL PETROCHEMICAL USA, INC.("TOTAL") as an enterprise project pursuant to a nomination and an application made by the City; and, WHEREAS, the City desires to pursue the creation of the proper economic and social environment in order to induce the investment of private resources in productive business enterprises located in the City and its extra territorial jurisdiction and to provide employment to residents of enterprise zones and to other economically disadvantaged individuals; and, WHEREAS, pursuant to Chapter 2303, Subchapter F of the Texas Enterprise Zone Act, Texas Government Code (the "Act"), TOTAL has applied to the City for designation as an enterprise project; and, WHEREAS, the City finds that TOTAL meets the criteria for designation as an enterprise project under Chapter 2303, Subehapter F of the Act on the following grounds: TOTAL is a "qualified business" under Section 2303.402 of the Act since it will be engaged in the active conduct of a trade or business at a qualified business site within the governing body's jurisdiction located outside of an enterprise zone and at least thirty-five percent (35.0%) of the business' new employees will be residents of an enterprise zone or economically disadvantaged individuals; and P.R. 14243 DLW 07/10/07 There has been and will continue to be a high level of cooperation between public, private, and neighborhood entities within the area; and The designation of TOTAL as an enterprise project will contribute significantly to the achievement of the plans of the City for development and revitalization of the area. WHEREAS, the City finds that TOTAL meets the criteria for tax relief and other incentives adopted by the City and nominates TOTAL as an enterprise project on the grounds that it will be located at the qualified business site and will create a higher level of employment, economic activity and stability; and WHEREAS, the City finds that it is in the best interest of the City to nominate TOTAL as an enterprise project pursuant to the Act; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PORT ARTUR, TEXAS: THAT the facts and opinions in the preamble are tree and correct. THAT TOTAL is a "qualified business", as defined in Section 2303.402 of the Act, and meets the criteria for designation as an enterprise project, as set forth in Section 2303, Subchapter F of the Act. THAT TOTAL qualifies as a Triple Jumbo Enterprise Project as defined in Section 2303.407 (b) (6) and Section 2303.407 (d) of the Act because TOTAL will be making a capital investment in a project in excess of $250,000,000. The City finds that it is in the best interest of the City to nominate TOTAL as a Triple Jumbo Enterprise Project under the Act. THAT the Triple Jumbo Enterprise Project designation must be for a predetermined designation period approved by the Bank, with a beginning date and ending date for the Project; and the designation period for the Project may not exceed five (5) years from the date on which the designation is made, as required by Section 2303.404 of the Act. TOTAL and the City request that the Bank approve September 1, 2007, as the beginning date and September 1, 2012, as the ending date of the Project. READ, ADOPTED AND APPROVED this __ day of July, A.D., 2007 at a Regular Meeting of the City Council of the City of Port Arthur, Texas by the following votes: AYES: MAYOR COUNC1LMEMBERS P.R. 14243 DLW 07/10/07 NOES: ATTEST: CITY SECRETARY MAYOR APPROVED AS TO FORM: CITY ATTORNEY APPROVED FOR ADMINISTRATION: CITY MANAGER ~ECTOR OF PLANNING