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HomeMy WebLinkAboutItem 08 & 09 - GamestopMEMO TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: BRUNO RUMBELOW, CITY MANAGER MEETING DATE: NOVEMBER 1, 2022 SUBJECT: APPROVAL OF AN ORDINANCE TO THE CITY'S ENTERPRISE ZONE PROGRAM - GAMESTOP, INC ECONOMIC DEVELOPMENT AND TOURISM, AS A TEXAS ENTERPRISE PROJECT RECOMMENDATION: City Council to consider approval of an ordinance 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 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 to promote job retention and/or creation and capital investment. GameStop currently has a total of approximately 1,300 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 request 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. The currently planned upgrade will improve the efficiency and viability of GameStop as a whole and allow them to retain important local jobs. Staff recommends approval. ORDINANCE NO. 2022-081 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF GRAPEVINE, TEXAS ORDAINING THE CITY'S PARTICIPATION IN THE TEXAS ENTERPRISE ZONE PROGRAM PURSUANT TO THE TEXAS ENTERPRISE ZONE ACT, CHAPTER 2303, TEXAS GOVERNMENT CODE (THE "ACT"), IDENTIFYING AVAILABLE TAX INCENTIVES, DESIGNATING A LIAISON FOR COMMUNICATION WITH INTERESTED PARTIES, NOMINATING GAMESTOP, INC. TO THE OFFICE OF THE GOVERNOR, ECONOMIC DEVELOPMENT AND TOURISM ("EDT") THROUGH THE ECONOMIC DEVELOPMENT BANK (THE "BANK") AS AN ENTERPRISE PROJECT; DECLARING AN EMERGENCY AND PROVIDING AN EFFECTIVE DATE WHEREAS, the City Council of the City of Grapevine (the "City") desires to create the proper economic and social environment to induce investment of private resources in productive business enterprises located in severely distressed areas of the City and the provide employment to residents of such areas; and WHEREAS, the Project is located in the City's jurisdiction in an area designated as an enterprise zone; and WHEREAS, pursuant to Chapter 2303, Subchapter F of the Act, GameStop, Inc. has applied to the City for designation as an enterprise project; and WHEREAS, the City finds that GameStop, Inc. meets the criteria for tax relief and other incentives adopted by the City on the grounds that it will be located at the qualified business site, will create a higher level of employment, economic activity and stability; and WHEREAS, a public hearing to consider this ordinance will be held by the City Council of the City of Grapevine, Texas on November 1, 2022; and WHEREAS, all constitutional and statutory prerequisites for the approval of this ordinance have been met, including but not limited to the Open Meetings Act and Chapter 211 of the Local Government Code; and WHEREAS, the City Council deems the adoption of this ordinance to be in the best interests of the health, safety, and welfare of the public. NOW THEREFORE, BE IT ORDAINED 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. That the City nominates GameStop, Inc. for Enterprise Project status. Section 3. That the local incentives identified and summarized briefly in the attached Exhibit "A", at the election of the governing body, are or will be made available to nominated Projects in the City of Grapevine. Section 4. That the enterprise zone areas within the City are reinvestment zones in accordance with the Texas Tax Code, Chapter 312. Section 5. That the City of Grapevine City Council directs and designates the City Manager, or his designee, as the City's liaison to communicate and negotiate with the EDT through the Bank and Enterprise Project(s) and to oversee enterprise zone activities and communications with qualified businesses and other entities in an enterprise zone or affected by an Enterprise Project. Section 6. That 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: a) 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 the qualified business site within the governing body's jurisdiction, located outside an enterprise zone, and at least thirty-five percent (35%) of the business' new employees will be residents of an enterprise zone, economically disadvantaged individuals, or veterans; and b) There has been and will continue to be a high level of cooperation between public, private, and neighborhood entities in the area; and c) 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. Section 7. That the Enterprise Project shall take effect on the date of designation of the enterprise project by EDT and terminate 5 years after the date of designation. Section 8. That the fact that the present ordinances and regulations of the City of Grapevine, Texas, are inadequate to properly safeguard the health, safety, morals, peace and general welfare of the inhabitants of the City of Grapevine, Texas, creates an emergency for the immediate preservation of the public business, property, health, safety and general welfare of the public which requires that this ordinance shall become effective from and after the date of its final passage, and it is accordingly so ordained. Ordinance No. 2022-081 2 PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF GRAPEVINE, TEXAS on this the 18th day of October, 2022. APPROVED: William D. Tate Mayor ATTEST: Tara Brooks City Secretary APPROVED AS TO FORM: Matthew C.G. Boyle City Attorney Ordinance No. 2022-081 3 Exhibit A Name of Incentive Description of Incentive Local Sales Tax Refund The City may allow sales and use tax refunds. Tax Increment Financing Tax Increment Financing Freeport Exemption Exempts goods -in -transit from ad valorem taxes Economic Development Portion of City sales tax devoted to economic development Sales Tax (413) projects Contribution Chapter 380/381 Municipalities and counties are authorized to offer incentives designed to promote economic development Other Tax Deferrals, Tax Other Tax Deferrals, Tax Refunds or Tax Incentives Refunds or Tax Incentives Zoning Zoning changes are available to residents Changes/Variances Impact/Inspection Fee Impact/inspection fee exemptions are available to Exemptions residents Streamlined Permitting City may allow permit applications and supporting materials to be tendered to one department for distribution to the appropriate City departments. Improved Police and/or Fire Protection Community Crime Prevention Programs Special Public Transportation Routes or Reduced Fares Capital Improvements in Water and Sewer Facilities Road Repair Creation or Improvements of Parks Safety and protection of City residents is made a priority by improving our police and fire protection services Safety and protection of City residents is made a priority through local crime prevention programs Transportation options or reduced fares have been made available to the public The City may provide resources for a capital improvement plan related to water and sewer service The City is responsible for maintaining and repairing public streets and alleys inside City limits Maintain parks and promote healthy lifestyle for City residents Ordinance No. 2022-081 4 Low -Interest Loans for Low -Interest loans for housing rehabilitation or new Housing Rehabilitation construction are available or New Construction Low -Interest Loans for Low interest loads are available to businesses Business Provision of Publicly Publicly owned land may be provided for development Owned Land for purposes Development Purposes Promotion and Convention and Visitors Bureau and Chamber of Marketing Services Commerce Job Training and Offered in conjunction with local community college and Employment Services technical schools Retraining Program Offered in conjunction with local community college and technical schools Literacy and Offered in conjunction with local community college and Employment Skills technical schools Services Vocation Education Offered in conjunction with local community college and technical schools Customized Job Offered in conjunction with local community college and Training technical schools Ordinance No. 2022-081 5