Business Type: Expansion County: Douglas County Development Authority Representative: Andrew Haskin, NNDA

Size: px

Start display at page:

Download "Business Type: Expansion County: Douglas County Development Authority Representative: Andrew Haskin, NNDA"

Gwenda Jefferson
6 years ago
Views:

1 Board Summary Starbucks Coffee Company P.O. Box 34442, S-Tax, Seattle, WA Date: July 17, 2017 Main Location: Carson City Todd McCullough, Regional Distribution Manager Manufacturing and Distribution Business Type: Expansion County: Douglas County Development Authority Representative: Andrew Haskin, NNDA APPLICATION HIGHLIGHTS - Starbucks Coffee Company is planning a 700,000 square foot expansion of its existing Douglas County facility. - The company will have an additional 30 acres of land remaining after the 700,000 square foot expansion. If growth continues, the company may consider a further expansion using this vacant land at a later time. - The company was named 'Business of the Year' for Douglas County in 2016, for a variety of reasons, including its growth, benefits programs, sustainability efforts and ongoing connection with the area. PROFILE Starbucks Corporation is an American coffee company and coffeehouse chain. The company was founded in Seattle, Washington in The company currently operates more than 24,000 retail stores in 70 countries. The Carson Valley Roasting Center and Distribution Center opened in Minden, NV in 2003 and services California, Nevada, and Utah, as well as parts of Arizona and Asia Pacific. The Carson Valley facility is also the site of the first Starbucks Inclusion Academy. Launched in 2014, it provides six weeks of training to help individuals with disabilities gain meaningful work experience in manufacturing, warehousing, and distribution. Source: Starbucks Coffee Company SIGNIFICANCE OF ABATEMENTS IN THE COMPANY'S DECISION TO RELOCATE/EXPAND The abatements and incentives offered by Nevada will assist the company to facilitate further growth. The addition of Starbucks jobs in Douglas County will provide employment diversity in a region where one-third of the workforce holds lower-paying tourism and leisure positions. Douglas County officials support this expansion, as they focus on growing the industrial sector as well as the number of working families in their region. Source: Starbucks Coffee Company REQUIREMENTS Statutory Application Sufficient % Over / Under Job Creation Yes 175% Average Wage $19.36 $21.16 Yes 9% Equipment Capex (SU & MBT) $1,440,538 $4,448,000 Yes 209% Equipment Capex (PP) $1,440,538 $4,448,000 Yes 209% INCENTIVES Requested Terms Estimated $ Amount Sales Tax Abmt. 2% for 2 years $226,848 Modified Business Tax Abmt. 50% for 4 years $104,002 Personal Property Tax Abmt. 50% for 10 years $72,982 Total $403,832 JOB CREATION Contracted 24-Month Projection 5-Year Projection OTHER CAPITAL INVESTMENT Land Building Purchase BTS / Building Improvements $0 $0 $48,500,000 ECONOMIC IMPACT ESTIMATES (10-Year Cumulative) Total Construction Total Jobs Supported Total Payroll Supported $63,692,251 $17,065,818 Total Output Estimate $195,455,598 $72,214,154 Estimate includes jobs, payroll & output by the company assisted as well as the secondary impacts to other local businesses. NEW TAX REVENUE ESTIMATES (10-Year Cumulative) Direct Indirect Total Local Taxes Property $5,401,439 $2,329,533 $7,730,972 Sales $1,607,775 $459,285 $2,067,060 Lodging $0 $36,162 $36,162 State Taxes Property $263,107 $248,788 $511,895 Sales $719,460 $394,892 $1,114,352 Modified Business $482,544 $241,682 $724,226 Lodging $0 $1,043 $1,043 Total $8,474,325 $3,711,385 $12,185,710 IMPACT ASSESSMENT Economic Impact per Abated Dollar New Total Tax per Abated Dollar $484 $30.18 EMPLOYEE BENEFITS - Percentage of health insurance covered by company: 70%. - Health care package cost per employee - $4,170 annually with options for dependents. - Overtime, PTO/Sick/Vacation, COLA Adjustments, Tuition Assistance, Retirement Plan / Profit Sharing / 401(k), Merit Increases, Bonus. NOTES - Percentage of market outside of Nevada: 85%. - The company is also considering Washington and California as potential locations.

3 June 2 nd, 2017 Steve Hill Executive Director Nevada Governor s Office of Economic Development 555 E. Washington Ave., Suite 5400 Las Vegas, NV RE: Request for Incentives from the Nevada Governor s Office of Economic Development Dear Mr. Hill, Starbucks Coffee Company is hereby requesting the Nevada Governor s Office of Economic Development provide economic incentives for the company to expand at their current facilities at 2525 Starbucks Way, Minden, NV The Carson Valley Roasting Center and Distribution Center opened in Minden, NV in 2003 and services all of California, Nevada, and Utah, as well as parts of Arizona and Asia Pacific. The 700,000 square foot expansion will add 113 jobs on-site, including managerial, supervisory, and coordination and distribution partnership roles. Only the distribution portion of the building will be enlarged; the roasting side of the operation will remain unchanged. The expanded portion is planned to break ground in June 2017 and is expected to be up and running in Q Sales and Use Tax, Personal Property Tax, and Modified Business Tax Abatements were a significant factor in the decision to expand in Nevada. The addition of Starbucks jobs in Douglas County will provide employment diversity in a region where one third of the workforce holds lower-paying tourism and leisure positions. Our hope is local political leadership is excited about this potential expansion, as they try to grow the industrial sector in their region. Starbucks was named Business of the Year for Douglas County in 2016, and continues to be a vital contributory member of the community, volunteering thousands of hours of community service and making sizable donations to local nonprofits. We plan on continuing those efforts with this potential expansion. Starbucks will have an additional 30 acres of land remaining after the 700,000 square foot expansion. If growth continues, the company may consider a further expansion using this vacant land at a later time. Sincerely, Todd McCullough Starbucks Coffee Company

4 Incentive Application Company Name: Starbucks Coffee Company Date of Application: June 9, 2017 Company is an / a: (check one) New location in Nevada Expansion of a Nevada company Section 1 - Type of Incentives Please check all that the company is applying for on this application: Sales & Use Tax Abatement Modified Business Tax Abatement Personal Property Tax Abatement Section 2 - Corporate Information COMPANY CONTACT NAME Todd McCullough ADDRESS tmccullo@starbucks.com Recycling Real Property Tax Abatement Other: COMPANY NAME (Legal name under which business will be transacted in Nevada) Starbucks Coffee Company CORPORATE ADDRESS P.O. Box 34442, S-Tax MAILING ADDRESS TO RECEIVE DOCUMENTS (If different from above) 2525 Starbucks Way TELEPHONE NUMBER Sales & Use Tax Deferral CITY / TOWN Seattle CITY / TOWN STATE / PROVINCE ZIP Minden NV WEBSITE starbucks.com COMPANY CONTACT TITLE Regional Distribution Director PREFERRED PHONE NUMBER Has your company ever applied and been approved for incentives available by the Governor's Office of Economic Development? If Yes, list the program awarded, date of approval, and status of the accounts (attach separate sheet if necessary): FEDERAL TAX ID # STATE / PROVINCE ZIP WA Yes No Section 3 - Program Requirements Please check two of the boxes below; the company must meet at least two of the three program requirements: A capital investment of $1,000,000 in eligible equipment in urban areas or $250,000 in eligible equipment in rural areas are required. This criteria is businesses. In cases of expanding businesses, the capital investment must equal at least 20% of the value of the tangible property owned by the business. New businesses locating in urban areas require fifty (50) or more permanent, full-time employees on its payroll by the eighth calendar quarter following the quarter in which the abatement becomes effective. In rural areas, the requirement is ten (10) or more. For an expansion, the business must increase the employees on its payroll by 10% more than its existing employees prior to expansion, or by 25 (urban) or 6 (rural) employees, whichever is greater. In urban areas, the average hourly wage that will be paid by the business to its new employees is at least 100% of the average statewide hourly wage. For in rural areas, the average hourly wage will equal or exceed the lesser of the county-wide average hourly wage or statewide average hourly wage. Note: Criteria is different depending on whether the business is in a county whose population is 100,000 or more or a city whose population is 60,000 or more (i.e., urban area), or if the business is in a county whose population is less than 100,000 or a city whose population is less than 60,000 (i.e., rural area). Section 4 - Nevada Facility Type of Facility: Headquarters Technology Back Office Operations Research & Development / Intellectual Property PERCENT OF COMPANY'S NEVADA LOCATION MARKET OUTSIDE OF NEVADA ~85% NAICS CODE / SIC NAICS SIC 5812 DESCRIPTION OF COMPANY'S NEVADA OPERATIONS Manufacturing and Distribution PROPOSED / ACTUAL NEVADA FACILITY ADDRESS 2525 Starbucks Way Q Service Provider Distribution / Fulfillment Manufacturing Other: EXPECTED DATE OF NEW / EXPANDED OPERATIONS (MONTH / YEAR) INDUSTRY TYPE Accommodation and Food Services CITY / TOWN COUNTY ZIP Minden Douglas WHAT OTHER STATES / REGIONS / CITIES ARE BEING CONSIDERED FOR YOUR COMPANY'S RELOCATION / EXPANSION / STARTUP? States: WA, CA 1

5 Section 5 - Complete Forms (see additional tabs at the bottom of this sheet for each form listed below) Check the applicable box when form has been completed. 5 (A) Equipment List 5 (B) Employment Schedule 5 (C) Evaluation of Health Plan Section 6 - Real Estate & Construction (Fill in either New Operations/Startup or Expansion, not both.) New Operations / Start Up - Plans Over the Next Ten Years Expansions - Plans Over the Next 10 Years Part 1. Are you currently/planning on leasing space in Nevada? If No, skip to Part 2. If Yes, continue below: What year(s)? How much space (sq. ft.)? Annual lease cost of space: Do you plan on making building tenant improvements? If No, skip to Part 2. If Yes *, continue below: When to make improvements (month, year)? Part 2. Are you currently/planning on buying an owner occupied facility in Nevada? If No, skip to Part 3. If Yes *, continue below: Purchase date, if buying (month, year): How much space (sq. ft.)? Do you plan on making building improvements? If No, skip to Part 3. If Yes *, continue below: When to make improvements (month, year)? Part 3. Are you currently/planning on building a build-to-suit facility in Nevada? If Yes *, continue below: When to break ground, if building (month, year)? Estimated completion date, if building (month, year): How much space (sq. ft.)? Part 1. Are you currently leasing space in Nevada? No If No, skip to Part 2. If Yes, continue below: What year(s)? How much space (sq. ft.)? Annual lease cost at current space: Due to expansion, will you lease additional space? If No, skip to Part 3. If Yes, continue below: Expanding at the current facility or a new facility? What year(s)? How much expanded space (sq. ft.)? Annual lease cost of expanded space: Do you plan on making building tenant improvements? If No, skip to Part 3. If Yes *, continue below: When to make improvements (month, year)? Part 2. Are you currently operating at an owner occupied building in Nevada? Yes If No, skip to Part 3. If Yes, continue below: How much space (sq. ft.)? 362,911 Current assessed value of real property? $6,877, Due to expansion, will you be making building improvements? Yes If No, skip to Part 3. If Yes *, continue below: When to make improvements (month, year)? Q Part 3. Do you plan on building or buying a new facility in Nevada? Yes If Yes *, continue below: Purchase date, if buying (month, year): N/A When to break ground, if building (month, year)? Jun-2017 Estimated completion date, if building (month, year): Jun-2018 How much space (sq. ft.)? 720,000 * Please complete Section 7 - Capital Investment for New Operations / Startup. * Please complete Section 7 - Capital Investment for Expansions below. BRIEF DESCRIPTION OF CONSTRUCTION PROJECT AND ITS PROJECTED IMPACT ON THE LOCAL ECONOMY (Attach a separate sheet if necessary): The Carson Valley Roasting Center and Distribution Center opened in Minden, NV in 2003 and services all of California, Nevada, and Utah, as well as parts of Arizona and Asia Pacific. The 700,000 square foot expansion will add 113 jobs on-site, including managerial, supervisory, and coordination and distribution partnership roles. Only the distribution portion of the building will be enlarged; the roasting side of the operation will remain unchanged. The expanded portion will break ground in June 2017 and is expected to be up and running in Q The addition of Starbucks jobs in Douglas County will provide employment diversity in a region where one third of the workforce holds lower-paying tourism and leisure positions. Douglas County officials are excited about this expansion, as they try to grow the industrial sector as well as the number of working families in their region. Starbucks was names Business of the Year for Douglas County in 2016, and continues to be a vital contributory member of the community, volunteering thousands of hours of community service and making sizable donations to local nonprofits. 2

6 Section 7 - Capital Investment (Fill in either New Operations/Startup or Expansion, not both.) New Operations / Start Up Expansions How much capital investment is planned? (Breakout below): How much capital investment is planned? (Breakout below): Building Purchase (if buying): $0 Building Purchase (if buying): $0 Building Costs (if building / making improvements): $0 Building Costs (if building / making improvements): $48,500,000 Land: $0 Land: $0 Equipment Cost: $0 Equipment Cost: $4,448,000 Total: $0 Total: $52,948,000 Is the equipment purchase for replacement of existing equipment? No Current assessed value of personal property in NV: $7,202,692 (Must attach the most recent assessment from the County Assessor's Office.) Section 8 - Employment (Fill in either New Operations/Startup or Expansion, not both.) New Operations / Start Up How many full-time equivalent (FTE*) employees will be created by the end of the first eighth quarter of new operations?: Average hourly wage of these new employees: Expansions How many full-time equivalent (FTE*) employees will be created by the end of the first eighth quarter of expanded operations?: 99 Average hourly wage of these new employees: $21.16 How many FTE employees prior to expansion?: Average hourly wage of these existing employees: Total number of employees after expansion: 361 $ * FTE represents a permanent employee who works an average of 30 hours per week or more, is eligible for health care coverage, and whose position is a "primary job" as set forth in NAC OTHER COMPENSATION (Check all that apply): Overtime Merit increases Tuition assistance Bonus PTO / Sick / Vacation COLA adjustments Retirement Plan / Profit Sharing / 401(k) Other: BRIEF DESCRIPTION OF ADDITIONAL COMPENSATION PROGRAMS AND ELIGIBILITY REQUIREMENTS (Attach a separate sheet if necessary): See Attached. Section 9 - Employee Health Insurance Benefit Program Is health insurance for employees and an option for dependents offered?: Package includes (check all that apply): Medical Vision Dental Yes (copy of benefit plan must be attached) Other: Qualified after (check one): Upon employment Three months after hire date Six months after hire date Other: No Health Insurance Costs: Percentage of health insurance coverage by: Cost of health insurance for company (annual amount per employee): $4, Company: 70% Health Plan annual out-of-pocket maximum (individual): $ 5, Employee: 30% 3

8 Site Selection Factors Company Name: Starbucks Coffee Company County: Douglas County Section 1 - Site Selection Ratings Directions: Please rate the select factors by importance to the company's business (1 = very low; 5 = very high). Attach this form to the Incentives Application. Availability of qualified workforce: 5 Transportation infrastructure: 2 Labor costs: 3 Transportation costs: 3 Real estate availability: 1 State and local tax structure: 3 Real estate costs: 1 State and local incentives: 4 Utility infrastructure: 3 Business permitting & regulatory structure: 5 Utility costs: 3 Access to higher education resources: 3 OTHER FACTORS & RATINGS: Potential for Further Expansion - 5 5

9 5(A) Capital Equipment List Company Name: Starbucks Coffee Company County: Douglas County Section 1 - Capital Equipment List Directions: Please provide an estimated list of the equipment [columns (a) through (c)] which the company intends to purchase over the two-year allowable period. For example, if the effective date of new / expanded operations begins April 1, 2015, the two-year period would be until March 31, Add an additional page if needed. For guidelines on classifying equipment, visit: tax.nv.gov/localgovt/policypub/archivefiles/personal_property_manuals. Attach this form to the Incentives Application. (a) Equipment Name/Description Conveyor Equipment Distribution Center Automation - Hardware Distribution Center Automation - Softwware / Integration Pallet Lift Tables Baler Corrugate Take Away System and Baler Auto Tie Baler Fork Lift Chargers IT Infrastructure Back Up Generator Office Printers Break Room Equipment / Fridges, Coffee Equipment, Etc. Electric Carts ( b) (c) (d) # of Units Price per Unit Total Cost 2 $450, $900, $110, $110, $2,200, $2,200, $12, $288, $15, $15, $550, $550, $125, $125, $8, $48, $75, $75, $75, $75, $12, $24, $20, $20, $6, $18, TOTAL EQUIPMENT COST Is any of this equipment* to be acquired under an operating lease? *Certain lease hold equipment does not qualify for tax abatements Yes $4,448, No 6

10 5(B) Employment Schedule Company Name: Starbucks County: Douglas County Section 1 - Full-Time Equivalent (FTE) Employees Directions: Please provide an estimated list of full time employees [columns (a) through (d)] that will be hired and employed by the company by the end of the first eighth quarter of new / expanded operations. For example, if the effective date of new / expanded operations is April 1, 2015, the date would fall in Q2, The end of the first eighth quarter would be the last day of Q2, 2017 (i.e., June 30, 2017). Attach this form to the Incentives Application. A qualified employee must be employed at the site of a qualified project, scheduled to work an average minimum of 30 per week, if offered coverage under a plan of health insurance provided by his or her employer, is eligible for health care coverage, and whose position of a primary job as set forth in NAC Distribution Partner Distribution Specialist Distribution Coordinator Distribution Lead Distribution Supervisor Distribution Sr Supervisor Distribution Manager Distribution Project Manager Automations Specialist Maintenance Mechanic TOTAL (a) Year 3-Year 4-Year 5-Year (a) New Hire Position Title/Description Section 2 - Employment Projections (b) ( c ) (d) (e) (f) Number of Average Hourly Average Weekly Annual Wage per Positions Wage Hours Position Total Annual Wages 50 $ $35, $1,760, $ $40, $977, $ $44, $222, $ $50, $253, $ $76, $382, $ $86, $259, $ $107, $107, $ $94, $94, $ $67, $134, $ $54, $162, $21.16 $4,357, Directions: Please estimate full-time job growth in Section 2, complete [columns (b) through (c)]. These estimates are used for state economic impact and net tax revenue analysis that this agency is required to report. The company will not be required to reach these estimated levels of employment. (b) Number of FTE(s) Projected (c) Average Hourly Wage (d) Payroll 113 $20.86 $4,903, $20.86 $4,903, $20.86 $4,903,

12 Nevada Business License Information STARBUCKS MANUFACTURING CORPORATION Business Entity Information Status: Active File Date: 6/11/2001 Type: Foreign Corporation Entity Number: C Qualifying State: WA Managed By: NV Business ID: NV List of Officers Due: Expiration Date: Business License Exp: 6/30/2018 6/30/2018 STARBUCKS CORPORATION Business Entity Information Status: Active File Date: 12/8/1994 Type: Foreign Corporation Entity Number: C Qualifying State: WA Managed By: NV Business ID: NV List of Officers Due: Expiration Date: Business License Exp: 12/31/ /31/2017

Business Type: New County: Clark County Development Authority Representative: Michael Walsh, LVGEA

Business Type: New County: Clark County Development Authority Representative: Michael Walsh, LVGEA Board Summary PRA Group, Inc. 120 Corporate Blvd., rfolk, VA 23502 Date: September 19, 2017 Main Location: Las Vegas Tim Rees, Senior Vice President - Core Collections Collections Agency Call Center Business