Title
A Resolution approving an Economic Development Agreement between the City Of Colorado Springs and Project All Natural
Presenter:
Jessie Kimber, Economic Development Officer
Shawna Lippert, Economic Development Manager
Body
Summary:
Project All Natural is a nutritional and health products developer and manufacturer. The company has locations in the U.S. This is a competitive project as the company is considering three (3) U.S. locations for expansion. Project All Natural is a Primary Employer, as they generate more than 50% of their revenue from outside of El Paso County. Project All Natural plans to secure and remodel an existing Facility in Colorado Springs. Additionally, the company plans to hire 41 employees over the next fifteen (15) years. With the creation of these new full-time jobs, Project All Natural plans to invest in business personal property, including furniture, fixtures, machinery, equipment, and construction materials for its facilities development and expansion. The Executive Branch is recommending that the City provide certain performance-based incentives for the company investment and job growth.
Background:
Project All Natural has investment plans for business personal property, construction materials, and job creation for its potential Colorado Springs facilities. The company estimates that it will invest $1.2 million in purchases of construction materials, furniture, fixtures, machinery, and equipment. The company expects to hire 19 new full-time employees over four (4) years (length of term), and a total of 41 new full-time employees over the next fifteen (15) years, at an average wage of $145,494. The Executive Branch is recommending that the City enter into an Economic Development Agreement to provide certain performance-based incentives for the company to invest in business personal property, construction materials, and job creation. The proposed City incentives are:
Sales and Use Tax Rebate on Annual Purchases of Business Personal Property (50% of the City’s 2% General Fund Rate, or a 1% Total Rebate).
Sales and Use Tax Rebate on Purchases of Construction Materials (50% of the City’s 2% General Fund Rate, or a 1% Total Rebate).
Taking into account the nature of the expansion, the level of investment and the new job creation, the Executive Branch is recommending a four (4) year agreement.
Previous Council Action:
N/A
Financial Implications:
City staff has conducted an Economic and Fiscal Impact Analysis (EFIA) to quantify the estimated economic benefit to the City that is expected to be derived by the expansion of Project All Natural in Colorado Springs. The following is a summary of the results:
COMMUNITY BENEFITS (ECONOMIC IMPACTS)
4 Year Jobs Impact - Expansion: 63
The analysis indicates a jobs impact from Project All Natural operations over a 4-year period, resulting in a total permanent jobs impact of 63 jobs from expansion.
4 Year Local GMP Impact - Expansion: $30.9 Million
The analysis indicates a growth in Gross Metropolitan Product (GMP) over a 4-year period, resulting in total GMP growth of $30,947,711 from expansion.
CITY REVENUE (FISCAL IMPACTS)
4 Year City Incentives: $11,500
City incentives for Project All Natural are estimated to be $11,500 over 4 years.
4 Year Net New City Revenue - Expansion: $145,192
The analysis indicates a total net new city revenue from the Project All Natural facilities in Colorado Springs over a 4-year period as follows: $156,692 gross new city revenue from expansion, less the city incentives of $11,500, for a total net new city revenue of $145,192.
The proposed incentive structure incurs no financial risk since it is strictly performance-based, and revenue is rebated to the company only after it has been collected.
City Council Appointed Board/Commission/Committee Recommendation:
N/A
Stakeholder Process:
N/A
Alternatives:
N/A
Recommended Action
Proposed Motion:
Approve the Resolution approving an Economic Development Agreement between the City of Colorado Springs and Project All Natural.
Summary of Ordinance Language
N/A