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HomeMy WebLinkAboutItem 09 - Paycom PayrollMEMO TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: BRUNO RUMBELOW, CITY MANAGER MEETING DATE: NOVEMBER 16, 2021 SUBJECT: CITY'S ENTERPRISE ZONE PROGRAM - PAYCOM PAYROLL, LLC. RECOMMENDATION: City Council to consider approval of a resolution to nominate Paycom Payroll, LLC, 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 sales and use taxes. None of the funding source will involve the local portion of state sales tax. BACKGROUND: Paycom Software, Inc. ("Paycom Software"), headquartered in Oklahoma City, OK, is a leading provider of comprehensive, cloud -based human capital management solution delivered as Software -as -a -Service. Paycom Payroll, LLC, ("Paycom Payroll" or "the Company"), whose ultimate parent is Paycom Software, operates eight facilities across Texas in Austin, Dallas, Fort Worth, San Antonio, Houston, Lewisville, Irving, and Grapevine. The Company currently employs approximately 546 people across the state of Texas with an estimated payroll of $48 million. Paycom Payroll offers online payroll services, software functionality and data analytics that small and large businesses need to manage the complete employment lifecycle, from recruitment to retirement. The Company is planning for approximately $18.6 million in new capital investment over the next five years at its Qualified Business Site in Grapevine (the "Texas Operations Center"), where it recently consolidated its Las Colinas location, is in the process of consolidating its Lewisville and Irving locations, and currently 461 full-time employees. Further, over the next five years, Paycom Payroll intends to create 358 new full-time jobs at the Texas Operation Center. The Company provides service and customer support to a variety of businesses both locally and nationally as it serves clients in all 50 states. The Texas Operations Center, located at 3489 State Highway 121 in Grapevine will be an ideal location to continue Paycom Payroll's growth in Texas as a leader in payroll and HR technology, serving businesses of all sizes in every industry. The Company has a history of corporate citizenship in the Dallas -Fort Worth metroplex that will continue in Grapevine. Paycom Payroll plans to attract employees from Grapevine and surrounding areas for roles within its customer service, software development, and sales departments. The Company is expanding its talent pool and job search for residents of Grapevine by hosting job fairs and recruiting events. Over the next five years, Paycom Payroll plans to invest approximately $18.6 million toward the construction of the Texas Operations Center as well as equipment for its employees. The planned investment includes approximately $7 million to finalize the construction of its first facility, an additional $6.8 million to begin the construction on its second facility, and an estimated $3.8 million in equipment purchases to assist in its software solutions and services. Additionally, approximately $980,000 will be invested in furnishings and IT equipment for the relocated and new employees in the Grapevine office. Scheduled for 2021 through 2026, these investments will increase efficiencies in the development of new technologies and will distinguish the Texas Operations Center in the competitive market space. Further, Paycom Payroll intends to create 358 new full-time jobs at the Texas Operations Center over the next five years, with the majority of jobs created in the development and services departments as well as product management, tax services and various others. The Company will maintain separate payroll and tax records relating to the business activity conducted at the Qualified Business Site and does not have any transportation needs not currently met through existing local and state infrastructure. A designation as an Enterprise Project and potential tax savings are very important to both Paycom Payroll and the City . The Company is committed to the State of Texas and the Grapevine community, and the incentive provided through the Enterprise Project designation will assist in offsetting the additional direct costs and overhead associated with the capital investment. Staff recommends approval of the resolution. RESOLUTION NO. 2021-020 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GRAPEVINE, TEXAS, NOMINATING PAYCOM PAYROLL, LLC 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 Paycom Payroll, LLC (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, the City finds that Paycom Payroll, LLC meets the criteria for designation as an enterprise project under Chapter 2303, Subchapter F of the Act on the following grounds- 1 . Paycom Payroll, LLC 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 Paycom Payroll, LLC 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 Paycom Payroll, LLC meets the criteria for tax relief and other incentives adopted by the City and nominates Paycom Payroll, LLC 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 Paycom Payroll, LLC 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 Paycom Payroll, LLC 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 Paycom Payroll, LLC 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 16th day of November, 2021. APPROVED: William D. Tate Mayor ATTEST: Tara Brooks City Secretary Resolution No. 2021-020 2 APPROVED AS TO FORM: Matthew C.G. Boyle City Attorney Resolution No. 2021-020