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Res 062-2020 WFEDC and Panda Biotech Proposal 7/7/2020Resolution No. 62-2020 Resolution approving the programs and expenditures of the Wichita Falls Economic Development Corporation (WFEDC) and amending the budget to include up to $2,800,000 for Panda Biotech related to their purchase and operation out of the existing facility at 8600 Interstate 44 WHEREAS, Texas Local Gov't. Code §501.073(a) provides "The corporation's authorizing unit will approve all programs and expenditures of a corporation and annually review any financial statements of the corporation"; and, WHEREAS, on June 18, 2020, the WFEDC approved the Project listed below and as stated in its agenda. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WICHITA FALLS, TEXAS, THAT: 1. The Wichita Falls Economic Development Corporation's approval and funding of the following programs and expenditures as described below and in said corporation's agenda, are approved: Panda Biotech Project: • A total of up to $2,800,000 to be used for the location of the company to the former Delphi Plant on 1-44 and the creation of up to 100 new primary jobs. 2. The current fiscal year budget of the WFEDC is amended to provide for the aforementioned expenditures and changes thereto. PASSED AND APPROVED this the 7t" day of July, 2020. ATTEST: MLL__,ecjm� City Clerk CHAMBER OF COMMERCE P-rNld��g a P,ri//rr �tntsrra�+.Yy. WICHITA FALLS CHAMBER OF COMMERCE PROJECT OVERVIEW* 1. Company Name Panda Biotech Present Locations Dallas, TX Location of Investment 8600 N. Central(Former Delphi Plant Type of Operation Industrial Hemp Production Total Investment $90,000,000 2. The total number of jobs being created and the number Incentives based on 50 new jobs, potential for up to 75 new of jobs currently in existence if applicable) jobs. 3. A description of the types of jobs being created, average Production, manufacturing, engineering, managements, sales, salary and if they include benefits administrative, maintenance. Salaries will beat or above $15 per hour with benefits. 4. The type and amount of economic incentive Property Tax Abatement - $562,858.42 (estimated over 7 recommended years) Forgivable Loan - $2,000,000 Cash for Jobs - $350,000 Relocation Incentive - $300,000 Rehabilitation of Delphi Lead RR track - $150,000 State Sales Tax Exemption on Mfg. Equipment - Unknown Incentive use aside from abatement Purchase of building and equipment 5. The time period incentives shall be granted 5 years 6. The estimated amount of taxes during the incentive $6,370,558.23 over 7 years period 7. The estimated amount of taxes that abated during the $562,858.42 over 7 years incentive period 8. Other Incentives Offered, Estimated Value & Term Forgivable Loan ,000 — 5 ears collateralized b 1st position on building Cash for Jobs per new job $350,000 — 5 ears 57yew(�s Relocation Incentive an average of $6,000 and 50 jobs - $300,000 5 ears Property Tax Abatement 9. Securitization of incentives First Position on Delphi Building 10. Issues for Consideration (Pro's & Con's) Pro A new manufacturing tenant in the Delphi Building - Good paying jobs - A new industry sector with unlimited growth potential - Potential for end user manufacturing to move to WF Con This is a new industry field, in essence a startup type of com an 'Eeonomie Impact ModelAttaehed •�Ira As CHAMBER OF COMMERCE A INDUSTRY June 12, 2020 Robert Carter, Chairman & CEO Panda Biotech Dallas, TX BearteraPandaBiotech. com Mr. Carter It is our understand Panda Biotech intends to purchase the building at 8600 N. Central, investing $90,000,000 and employing at least 50 full-time workers. To attact and support this project the Wichita Falls Chamber of Commerce is proposing the following incentives: Property Tax Abatement —Wichita County will be asked to abate personal property taxes for a period of 7 years starting with an 60% abatement and resulting in a 10% annual decline for the remaining years of the agreement. Foraiveable Loan — A $2,000,000 loan will be forgiven at a rate of 20%per year for a five year period with the guarantee the company meets and maintains agreed upon job creation requirements. Panda Biotech will give Wichita Falls Economic Development Corporation first postion on the building at 8600 N. Central as collateral for the loan. The loan will be entirely forgiven if Panda Biotech creates 50 full-time jobs at the Wichita Falls plant by the end of the fifth year. Cash for Jobs — Panda Biotech will be eligible for a $7,000 per employee incentive for every primary job created. The incentive will be paid per employee to the company after the sixth consecutive month of employment, and upon acceptable documentation of employment. Sales Tax Exemption on Manufacturing Equipment — Texas sales tax and use tax exempts tangible personal property that makes a chemical or physical change in the products being manufactured or is necessary and essential in the manufactuirng process. Rehabilitation of Delphi Lead Track — The Wichita Falls Economic Development Corporation will commit up to $150,000 for the repair and rehabilitation of the Delphi Lead Track inside the boundaries of the property. Employee Relocation Assistance —Panda Biotech will be eligible for an employee relocation incentive if the company recruits employees from outside of Wichita County. The company will receive this incentive if employee(s) relocate to Wichita County and remain a resident for a minimum of six (6) months. The incentive will be paid to the company after the sixth consecutive month of employment of each individual employee who relocates; and upon acceptable documentation of employment and residency. WICHITA FALLS CHAMBER OF COMMERCE AND INDUSTRY 900 8th Street, Suite 100 Wichita Falls, TX 76301 T: (940) 723-2741 F: (940) 723-8773 with itafal Ischamber. com The relocation incentive will be calculated in the following formula: Base Salary Range Incentive Amount Allowable $31,200—$50,000 $4,000 $50,001—$75,000 $6, 000 $75, 001 + $8, 000 Final approval of all incentives is contingent upon the following organizations: The City of Wichita Falls, Wichita Falls Economic Development Corporation, Wichita County and/or Office of the Governor- Economic Development & Tourism Department. Please do not hesitate to contact me if there are any questions. Sincerely, David A. Leezer, CecD, FM Vice President, Business Recruitment WICHITA FALLS CHAMBER OF COMMERCE AND INDUSTRY 900 8th Street, Suite 100 Wichita Falls, TX 76301 T: (940) 723-2741 F: (940) 723-8773 wichitafal Ischa tuber. com Panda Bio-Tech 2 Year Economic Impact Scenario 1: 50 Jobs Over 2 Years Wichita Falls, TX MSA Annual Impact of Fiber, Yarn, and Thread Mills Year 1 Direct Indirect Induced Year Total Employment 25 9 6 40 Sales/Output $ 4,496,334.27 $ 1,802,841.65 $ 1,010,145.94 $ 7,309,321.86 Compensation $ 971,155.69 $ 563,365.88 $ 302,867.01 $ 1,837,388.58 Year 2 Direct Indirect Induced Year Total Employment 25 9 6 40 Sales/Output $ 4,496,334.27 $ 1,802,841.65 $ 1,010,145.94 $ 7,309,321.86 Compensation $ 971,155.69 $ 563,365.88 $ 302,867.01 $ 1,837,388.58 Total Direct Employment 50 Total Sales $ 14,618,643.73 Total Compensation $ 3,674,777.16 Estimated Local Producers Impact' $ 30-45,000,000.00 *As provided by Panda BioTech J J w u 0 m 13 c m am Q) a _ U C Q 06 L r r u Ln su `m_ C a` m m U O -, c U i W 4, V) N U -0 �o U, a 3 N d` -a ar *' E fl C 0 � •r ,� E Q o u f4 O O ++ m y C 'u U O U Q c C Cn a.� qy p V Q u L W c E 0 3 .m O N Oi 0) X m •G Q N cq 0 Q w m C O C C L4.1 E a C (0 C3 ] N @ C O 4O vi C31 O O m vi ro +� 4. 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