Oak Point Incentive Decision Guide

Transcription

1 Oak Point Incentive Decision Guide The City of Oak Point, Texas and the Oak Point Economic Development Corporation (Oak Point EDC) are focused on growing the local economy by attracting and retaining quality businesses. Policy Guidelines & Evaluation Criteria : The City of Oak Point and the Oak Point EDC are committed to using the same standards and scoring matrix when considering offering incentives for economic development projects. The Oak Point EDC will evaluate each project for the City of Oak Point and the Oak Point EDC. Benefits should exceed costs, even after incentives are granted. Except in extraordinary situations, Oak Point should not be willing to go upside down on a deal, meaning that tax revenues must exceed public sector costs. Any front-loaded cash incentives should flow through the Oak Point EDC, with the City and EDC setting policies on returning taxes and/or fees paid by a company upon the execution of a specific set of agree upon performance measures between the firm and each participating jurisdiction. Chapter 380 of the Texas Local Government Code, due to its flexibility and simplicity, shall be the preferred tool for incentive agreements. To be eligible for incentives, a project should meet the following minimum requirements: Create or maintain at least 5 full-time equivalent jobs, with the average wage paid equal to or greater than the local average wage for the firm s industry sector), or Invest at least $250,000 in new taxable real and business personal property Must be an target industry or one that fills an unmet need or market In general, incentive packages offered by Oak Point should not extend beyond 10 years. The City of Oak Point and the Oak Point EDC reserves the right to craft a special incentive package in the case of unique or extraordinary opportunities for economic development. The applicant will submit an Incentives Application, a prospectus and/or business plan providing for such economic impacts and projections for the requested information as set forth in the thresholds to achieve section of the application. A performance agreement will be issued between the EDC and the City of Oak Point and the incentive recipient for all incentives granted. All incentives will be subject to compliance with all laws and legislation in the State of Texas. 1

2 Cost-Benefit Analysis: The Oak Point EDC will create a performance-based 10-year pro forma, regardless of years left on pro forma, for the project that includes key revenues and expenses which should be discounted for the net present value. Businesses must provide the following information to be considered for any incentives (this information is required in the Incentive Application): Business Description, including NAICS Code, years in Business, other locations Estimate of new capital investment Estimate of taxable sales Estimate of value of personal property and annual inventory Number of Employees, Full Time and Part Time, and projected employment growth for 10 years Wages for Employees Benefits offered to Employees and who is eligible for benefits Estimate of the percentage of employees, who will reside in Oak Point. This analysis shall be used to determine the value of any incentives. Most projects will not require calculating the indirect and induced economic impacts, but these can be a factor into the analysis, if deemed necessary. Key variables to be estimated include: Business Impact: Property Tax Revenues generated from the business Sales Tax Revenues generated from the business Permits and Fees Associated with Project City Services for Business Employee Impact: Property Tax Revenues generate from employees, which will reside in the City limits of Oak Point Sales Tax Revenues generated from employees City Services for employees, which will reside in Oak Point 2

3 Oak Point Economic Development Corporation Incentive Application INTERNAL USE ONLY Project Name: Date Application Received: Application Complete (y/n): - Page 1 -

4 General Information The Application for Incentives is intended for internal economic development analysis and efforts will be made to restrict circulation of the information included on the form to appropriate members of the City of Oak Point. However, please note that the Texas Open Records Act provides that information collected, assembled, or maintained by the City under a law or ordinance or in connection with the transaction of official business is generally considered to be public information. However, the Texas Public Information Act does provide that information relating to economic development negotiations with a business prospect is withheld from disclosure unless and until an agreement is reached. Instructions Please include requested information for all sections. Be accurate and thorough to avoid delays in processing. Where no response is possible, please write N/A. Attachments and additional pages are not required unless specifically requested in the application. We will contact you if supplemental information is required. Please submit a completed application and supporting documentation to: Oak Point Economic Development Corporation Attention: City Manager 100 Naylor Rd. Oak Point, Texas *Scanned applications can be submitted via to lolson@oakpointtexas.com Questions or Comments Luke Olson City Manager lolson@oakpointtexas.com (972) ext. 4 - Page 2 -

5 Company Information Company Name: Headquarters Location: City: State: Business Structure (i.e., Proprietorship, Partnership, Corporation): Primary Contact Name: Contact Title: Mailing Address: City: State: Zip: Phone: Business Description: Industry: NAICS: Company Age: Project Information New Business/Project in Oak Point: YES NO Expanding Business in Oak Point: YES NO Is the company considering other locations in the DFW area? YES NO Is the company considering other locations in Texas: YES NO Is the company considering other states as a location: YES NO Market for Product of Activity: Local State U.S. Global - Page 3 -

6 Please describe the Project: Why is an incentive necessary for the project to succeed financially? Project Timeline Expected Start Date: Expected Complete Date: Does the applicant own or lease the project s property: Own Lease If leased, indicate the landlord/owner: If leased, indicate the lease term: Project Capital Investment (U.S. Dollars) New Construction Expansion Existing Improvement Estimate of Improvement Values: Land Investment: Building Investment: Total Acres: Square Feet: Infrastructure Investment (Please list if applicable): - Page 4 -

7 Project Financing Method of Financing: Committed Level of Financing: Applicant Financial Institution Government Funding Grants Other Total Economic Impact Property Tax Land: YES NO Building: YES NO Inventory: YES NO Estimated Taxable Value of Property Sales Tax: YES NO Eligible for Freeport Exemption (exported inventory from Texas within 175 days): YES NO Will your business beneficially impact the local economy: Impact Local Revenue: YES NO Describe: Employment Impact Job Category Executive Manager Supervisor Staff Entry Level Total Number of Jobs Number of New Jobs Average Annual Wages Percent to be Locally Hired Average annual salary of existing jobs: _ Average annual salary of new jobs: - Page 5 -

8 Please describe training provided to employees: Does the company provide opportunities for employee advancement: YES Describe: NO Are there funds for additional employee education (tuition match, etc.): YES Describe: NO Does the company offer benefits package to employees: YES Describe: NO Quality of Life Considerations Does the company have a community outreach program: YES NO Describe: - Page 6 -

9 Other Information Please provide any additional thoughts or comments related to your project that could be pertinent to the evaluation process. Describe all financial and tax incentives sought from the Economic Development Corporation, and other economic incentives, i.e. matching funds grant, sale tax rebate. - Page 7 -

10 Describe all financial and tax incentives sought from the City of Oak Point, and other economic incentives, i.e. fee waivers, fast-track permitting sought, property tax abatements. Signature/Confirmation of Accuracy CONFIRMATION OF ACCURACY To the best of my knowledge and belief, the information contained in this Application for Incentives is true and correct, as evidenced by my signature below. I further certify that the business entity is in good standing under the laws of the jurisdiction(s) in which the entity is organized or authorized to conduct business and that no delinquent taxes are owed to any taxing entity. If incentives are awarded, the applicant will be subject to a performance agreement and be required to submit documentation regarding the number of employees, average wages by employee category, taxable sales, personal property inventory and any other pertinent information required in the contract for incentives awarded for the number of years stipulated in the performance agreement. Signature: (Company Representative) Date: - Page 8 -

11 Oak Point Economic Development Incentive Review The following Economic Development Matrix should be used to evaluate either sales or property tax incentives for new businesses in Oak Point City Limits. Evaluation Criteria Scoring Range No Yes Target Industry Economic and Fiscal Impact N/A Acceptable Good Excellent Sales Tax Generator Property Tax Generator Direct, Indirect and Induced Economic Impact Quality of Life Create Opportunities for Tourists & Residents Desired Development Location / Site Meets Building Design Standards Extraordinary Impact Project Leverages Incentives/Grants Number of Employees Capital Investment Total Possible Points. Points Incentive Guidance Less than 55 points Not eligible for incentives 55 to 69 points Up to 25% of the approved tax rebate rate for up to 10 years 70 to 84 points Up to 50% of the approved tax rebate rate for up to 10 years 85to 99 points Up to 75% of the approved tax rebate rate for up to 10 years More than 100 points Up to 100% of the approved tax rebate rate for up to 10 years 1

12 Category Description and Definitions Target Industry As part of the Strategic Planning Process, the Oak Point EDC identified a set of target industries for the community and indicated willingness to potentially offer additional incentives for these industries. Projects that align with the Oak Point s EDC s adopted target industry list and are eligible for points. Economic and Fiscal Impact Sales Tax Generator Can we estimate the level of sales tax this project will bring to the community? What is the community leakage/gap analysis for this particular industry? What is the payback period when a sales tax abatement is granted? Property Tax Generator What will the city receive or lose in property tax from this organization? What is the payback period when property tax is abated? What is the value of property tax that will be received under the abatement compared to the current rate of property tax? Direct, Indirect and Induced Economic Impact How will money spent by the business and its employees effect the local economy? Quality of Life Since no project can be evaluated strictly quantitatively, projects will have to considered based on the qualitative benefits as the quality of life implications. Create Opportunities for Both Tourists and Residents Desired Development Location / Site Building Design Standards / Site Plan Extraordinary Impact For Oak Point, a large project with an extraordinary impact would likely consist of 40 of new jobs and capital investment in excess of $750,000. Project Leverages County, State, or Federal Incentives/Grants Number of Employees: Acceptable >5 jobs Good >10 jobs Excellent >25 jobs 2

13 Capital investment Acceptable $100,000 Good $250,000 Excellent $500,000 3