HomeMy WebLinkAboutItem 07 - GamestopMEMOTO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: BRUNO RUMBELOW, CITY MANAGER
MEETING DATE: AUGUST 20, 2019
SUBJECT: APPROVAL OF A RESOLUTION TO THE CITY'S ENTERPRISE ZONE
PROGRAM - GAMESTOP, INC ECONOMIC DEVELOPMENT AND
TOURISM, AS ATEXAS ENTERPRISE PROJECT
RECOMMENDATION: Staff recommends that the City Council approve the attached resolution to
nominate GameStop, Inc. to the Office of the Governor, Economic
Development and Tourism as a Texas Enterprise Project.
FUNDING SOURCE: Economic Development incentives in the form of sales and use tax rebates
are derived from the state's portion of state sales and use taxes. None of
the funding source will involve the local portion of state sales tax.
BACKGROUND: The Enterprise Zone Program is a state incentive program designed tc
promote job retention and/or creation and capital investment. GameStop
currently has a total of approximately 2,100 employees combined at its
headquarters, refurbishing center and warehouse in Grapevine. At the
level of investment proposed by GameStop, the state will provide an
incentive of $2,500 per job for a total of 500 retained jobs with a maximum
total benefit of $1.25 million in sales tax rebates from the state's portion of
the sales tax over a five year period.
This is GameStop's fourth requested resolution to be nominated as a
Texas Enterprise Project. The first request was approved on August 3,
2010 to assist in upgrades to their refurbishing facility at 2200 William D.
Tate Avenue. The second request was approved on November 15, 2011
and involved an upgrade of the IT system in both the refurbishment center
and the headquarters at 625 Westport Parkway. The third request was
approved on August 15, 2017 and involved investments in software,
hardware and other infrastructure for the employee's personal computer
operating systems. This fourth request involves $5 million in planned
improvements on the IT systems for both the headquarters and
refurbishment/distribution facilities. The currently planned upgrade will
improve the efficiency and viability of GameStop as a whole and allow
them to retain jobs.
In order to qualify for the proposed rebate, a minimum of 35% of
GameStop's new hires must be either residents of a state enterprise zone
or economically disadvantaged as defined by the State Government Code.
GameStop must prove to the State Comptroller's Office that they are
meeting the retention and hiring criteria required by state law, prior to
rebates. The next deadline for submission of the application to the State is
September 1, 2019 and the selection process will take approximately 90
days.
DT
Ryan#�
August 9, 2019
Mr. Bob Farley
Economic Development Director
City of Grapevine
200 South Main Street
P.O. Box 95104
Grapevine, Texas 76099
Re: Texas Enterprise Project Nomination Request
Grapevine, Texas Facility
Dear Mr. Farley:
Three Galleria Tower
13155 Noel Road
Suite 100
Dallas, TX 75240-5090
Tel.: 972.934.0022
Fax: 972.960.0613
ryan.com
GameStop, Inc. ("GameStop") is a wholly -owned subsidiary of GameStop Corp. Incorporated in
Delaware and headquartered in Grapevine, Texas, GameStop Corp. is the world's largest video
game and entertainment software retailer and employs over 39,000 team members in more than
5,800 stores across the United States and in 14 countries worldwide. GameStop Corp. offers
customers the most popular new software, hardware and game accessories for next generation
video game systems as well as collectibles, apparel, gadgets, electronics and toys.
GameStop's headquarters and warehouse is located at 625 Westport Parkway, and the
Refurbishing Operations Center is located at 2200 William D. Tate Avenue in Grapevine Texas.
Over the next five years, GameStop plans to invest more than $5 million in capital improvement
upgrades including IT integration among GameStop's many integral software platforms to
improve efficiency throughout GameStop's operations. Additionally, GameStop is upgrading
their E-Commerce platform to better manage their online marketing, sales, and operations. This
will allow GameStop to improve their competitiveness in a market of ever-increasing online sales.
As a result of this investment, GameStop respectfully requests an Enterprise Project nomination
from the City of Grapevine for the September 3, 2019 round.
Section 2303.406(a)(4)(D) of the Texas Government Code allows a project or activity of a
qualified business to be designated as an Enterprise Project and receive job retention benefits if
the business has clearly demonstrated that "the business is able to employ individuals in
accordance with Section 2303.402." GameStop qualifies for job retention benefits under this
statutory provision because GameStop is an Equal opportunity Employer, and will use a
proprietary, voluntary questionnaire to actively track its new -hires to determine "economically
disadvantaged" hiring patterns. Additionally, GameStop, Inc. will geo-code its new -hires to
identify employees that reside in state Enterprise Zones. The data collected from the
Mr. Bob Farley
City of Grapevine
August 9, 2019
Page 2
questionnaires and geo-coding will be used to establish a best -practices model for hiring
employees in accordance with Section 2303.402.
If designated as an enterprise project by the State of Texas, GameStop commits to hiring thirty-
five percent (35%) economically disadvantaged persons, enterprise zone residents or veterans, for
its new or replacement personnel for certified jobs, during its enterprise project designation.
GameStop currently employs a combined 2,160 full-time employees at its Grapevine facilities.
GameStop expects to maintain its existing level of employment and retain 500 full-time jobs for
benefit under the Enterprise Zone Program. The benefit is state sales tax refund of $2,500 per job
up to a maximum of 500 jobs, for a total of $1.25 million, and there is no fiscal impact to the City
budget. These jobs meet the definition of a "retained job" in Texas Government Code §
2303.401(2) because they currently exist, provide and will continue to provide at least 1,820 hours
of employment annually, and will be employment positions for the longer of the duration of the
project's designation period or three years after the expiration date of the claim period for receipt
of state benefit.
GameStop believes that the success of their company and well-being of their employees are
directly related to the well-being of the communities in which they operate. GameStop proudly
gives back and supports local charities by donating thousands of volunteer hours each year to
various organizations such as Make -A -Wish, Autism Speaks, and Children's Miracle Network.
GameStop is proud to be an integral part of the City of Grapevine community and will continue to
be an active participant, contributor, and corporate citizen. GameStop is excited about the its
planned upgrades to its Grapevine facilities and looks forward to working with the Texas
Enterprise Zone Program and City of Grapevine in the coming years.
Sincerely,
Reece Macdonald
Taxpayer Representative
Enterprise Zone Projects
Gamestop — August 3, 2010 to assist in upgrades to their refurbishing facility at 2200 William D.
Tate Avenue. Gamestop's investment was over $5 million in upgrades to the building and they
were awarded a maximum of $1.25 million in state sales tax rebates.
Resolution 2010-024 (Expired)
Gamestop — November 15, 2011 to assist in an upgrade of the IT system in both the
refurbishment center and the headquarters at 625 Westport Parkway. Gamestop's investment
in new IT infrastructure was over $150 million and they requested a maximum of $2.5 million in
state sales tax rebates but were approved for a maximum of $1.25 million in state sales tax
rebates.
Resolution 2011-072 (Expired)
American Airlines — November 17, 2015 to assist in equipment and systems upgrades, a new
engine disassembly center, and a large parts warehouse and distribution center at 1600 W. 201"
Street. American Airlines' investment was over $80 million and the state will provide an incentive
of $2,500 per job per year for a total incentive of $1,250,000 in state sales tax rebates for the
five-year period.
Resolution 2015-069
American Airlines — May 3, 2016 to assist in a material handling system as well as equipment and
system upgrades at 1816 N. Service Road. American Airlines' investment was $5.17 million, and
the state will provide an incentive of $2,500 per job for a total incentive of $457,500 in state sales
tax rebates for the five-year period.
Resolution 2016-035
Gamestop — August 15, 2017 to assist in software, hardware, and other infrastructure for the
employee's personal computer operating system at the refurbishing facility at 2200 William D.
Tate Avenue and the headquarters at 525 Westport Parkway. GameStop's investment was
approximately $5 million over the next 5 years, and there will be a State Sales Tax rebate of
$2,500 per job for 500 retained jobs over a period of 5 years for a total of $1.25 million.
Resolution 2017-071
Gamestop — August 20, 2019 to assist in computer upgrades at the refurbishing and distribution
facility at 2200 William D. Tate Avenue and the headquarters at 525 Westport Parkway.
GameStop's investment will be approximately $5 million over the next 5 years, and there will be
a State Sales Tax rebate of $2,500 per job for 500 retained jobs over a period of 5 years for a total
of $1.25 million.
Resolution - (Proposed)
RESOLUTION NO. 2019-028
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
GRAPEVINE, TEXAS, NOMINATING GAMESTOP, INC. TO
THE OFFICE OF THE GOVERNOR, ECONOMIC
DEVELOPMENT AND TOURISM THROUGH THE
ECONOMIC DEVELOPMENT BANK FOR DESIGNATION
AS AN ENTERPRISE PROJECT ("PROJECT") UNDER
THE TEXAS ENTERPRISE ZONE PROGRAM UNDER THE
TEXAS ENTERPRISE ZONE ACT, CHAPTER 2303, TEXAS
GOVERNMENT CODE ("ACT").
WHEREAS, on August 3, 2010, the City of Grapevine, Texas (the "City") passed
Ordinance No. 2010-38 electing to participate in the Texas Enterprise Zone Program,
and the local incentives available under this resolution are the same on this date as
were outlined in Ordinance No. 2010-38; and
WHEREAS, the Office of the Governor Economic Development and Tourism
("OOGEDT") through the Economic Development Bank ("Bank") will consider
GameStop, Inc. (the "Company") as an enterprise project pursuant to a nomination and
an application made by the City; and
WHEREAS, the City Council of the City of Grapevine, Texas, 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 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"), GameStop, Inc. has applied for a fourth
time to the City for designation as an enterprise project, the first, second and third time
concerning different assets and successfully approved in the August 3, 2010, November
15, 2011 and August 25, 2017 City Council meetings; and
WHEREAS, the City finds that GameStop, Inc. meets the criteria for designation
as an enterprise project under Chapter 2303, Subchapter F of the Act on the following
grounds:
1. GameStop, Inc. 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, economically disadvantaged
individuals, or veterans; and
2. There has been and will continue to be a high level of cooperation between
public, private, and neighborhood entities within the area; and
3. The designation of GameStop, Inc. 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 GameStop, Inc. meets the criteria for tax relief and
other incentives adopted by the City and nominates GameStop, Inc. for enterprise
project status on the grounds that it will be located at the qualified business site, will
create a higher level of employment, economic activity and stability;
WHEREAS, all constitutional and statutory prerequisites for the approval of this
Resolution have been met, including but not limited to the Open Meetings Act; and
WHEREAS, the City Council deems the adoption of this resolution to be in the
best interests of the health, safety, and welfare of the public; and
WHEREAS, the City finds that it is in the best interest of the City to nominate
GameStop, Inc. as an enterprise project pursuant to the Act.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF GRAPEVINE, TEXAS:
Section 1. That all matters stated hereinabove are found to be true and correct
and are incorporated herein by reference as if copied in their entirety.
Section 2. The City finds that GameStop, Inc. 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.
Section 3. The City nominates GameStop, Inc. to the State of Texas for
Enterprise Project status.
Section 4. The enterprise project shall take effect on the date of designation of
the enterprise project by Office of the Governor, Economic Development and Tourism
and terminate 5 years after the date of designation.
PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF
GRAPEVINE, TEXAS on this the 20th day of August, 2019.
APPROVED:
William D. Tate
Mayor
Resolution No. 2019-028 2
ATTEST:
Tara Brooks
City Secretary
APPROVED AS TO FORM:
City Attorney
Resolution No. 2019-028