Title
A Resolution approving an Economic Development Agreement between the City of Colorado Springs and Project Bullseye
Presenter:
Bob Cope, Economic Development Officer
Shawna Lippert, Senior Economic Development Specialist
Body
Summary:
Project Bullseye is a rapidly growing small business that provides cybersecurity, software, and engineering solutions to government customers. The technology company has a unique approach to their services offered. Project Bullseye intends to expand into a new strategic location to expand their capabilities and to be in proximity to customers. Colorado Springs is one of at least three locations the company is considering for their expansion plans. Project Bullseye is a Primary Employer, as they generate more than 50% of their revenue from outside of El Paso County. Project Bullseye plans to secure and remodel an existing commercial location, mostly of office space. Additionally, the company plans to add secure facilities in the future. The company currently employs 214 employees at its Colorado Springs location, and over the next eight years plans to hire an additional 620 employees. With the creation of these new full-time jobs, Project Bullseye desires to invest in business personal property, including furniture, fixtures, machinery, equipment, and construction materials for its facilities redevelopment and expansion. The Executive Branch is recommending that the City provide certain performance-based incentives for the company investment and job growth.
Background:
Project Bullseye has investment plans for business personal property, construction materials, and job creation for its Colorado Springs facilities. The company estimates that it will invest $3.4 million in purchases of construction materials, furniture, fixtures, machinery, and equipment. The company expects to hire 620 new full-time employees over the next 8 years at an average wage of $153,125.
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).
The Executive Branch is recommending a ten (10) year agreement based on the level of projected investment and new job creation.
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 Bullseye in Colorado Springs. The following is a summary of the results:
COMMUNITY BENEFITS (ECONOMIC IMPACTS)
10 Year Jobs Impact - Combined (Expansion & Retention): 2,250
The analysis indicates a combined jobs impact from Project Bullseye’s operations over a 10-year period as follows: 1,673 jobs from expansion, 577 jobs from retention, resulting in a total combined permanent jobs impact of 2,250.
10 Year Local GMP Impact - Combined (Expansion & Retention): $1.4 Billion
The analysis indicates a combined growth in Gross Metropolitan Product (GMP) over a 10-year period as follows: $843 million from expansion, $530 million from retention, resulting in a total combined GMP growth of $1.4 billion.
CITY REVENUE (FISCAL IMPACTS)
10 Year City Incentives: $24,000
City incentives for Project Bullseye are estimated to be $24,000 over 10 years.
10 Year Net New City Revenue - Combined (Expansion & Retention): $13.4 Million
The analysis indicates a combined net new city revenue from the Project Bullseye facilities in Colorado Springs over a 10-year period as follows: $9 million from expansion, $4.3 million from retention, resulting in a combined net new city revenue of $13.4 million*.
(*Figures may not total due to rounding of estimates; net city revenues include items scheduled to sunset.)
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:
City Council can choose to approve or deny the Economic Development Agreement.
Recommended Action
Proposed Motion:
Approve the Resolution approving an Economic Development Agreement between the City of Colorado Springs and Project Bullseye
Summary of Ordinance Language
N/A