R2006-147 09-11-06
RESOLUTION NO. R2006-147
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
PEARLAND, TEXAS, AUTHORIZING THE PEARLAND ECONOMIC
DEVELOPMENT CORPORATION TO ENTER INTO AN ECONOMIC
INCENTIVE AGREEMENT WITH BOBCAT OF HOUSTON, INC.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND,
TEXAS:
Section 1. That the Pearland Economic Development Corporation is hereby
authorized to enter into an Economic Incentive Agreement with BobCat of Houston, Inc.
PASSED, APPROVED, AND ADOPTED this 11th day of September, A.D., 2006.
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~EID
MAYOR
ATTEST:
APPROVED AS TO FORM:
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DARR N M. COKER .
CITY ATTORNEY
Pearland EDC
Memo
To: Randy Ferguson
From: Fred Welch
cc: PEDC Board
Date: 11/16/2005
Re: Berry Companies (Bob Cat of Houston)
staff Analysis
Staff has reviewed the request for assistance from the Berry Companies to assist them in re-
habilitating a piece of property at the northwest comer of The Spectrum Business and Technology
Park. The company proposes to purchase the property for $825,000 and will need to make over
$400,000 in improvements to the building and property to bring it into compliance with the City's fac;:ade
requirements. The facility is in the city of Pearland and within the Spectrum Business Park Zone. The
area is not served by city utilities (water and sewer) and is not expected to be served by the city for
water and sewer for at least four to six years. The improvements they propose to make are in
accordance with the zoning for the area and comply with the PUD approved by Planning and Zoning
and City Council for this property. The PUD allowed for considerations to the fac;:ade of the building and
the setback from Beltway 8 necessitate when the Harris County Toll Road Authority took several feet of
right away from the property in the construction of its toll booth. The improvements, when completed
would bring the property into compliance with the requirements of the PUD and the City of Pearland.
Bob Cat of Houston is a sales and service center for heavy equipment used in the construction
industry. Their product line includes both products for sale and rent. They propose to operate a full
service parts and distribution center from this location to support their operations. Sales and service
work from their Gulf Freeway facility would be moved to this location. The company projects a 60%
increase in sales volume over the next three to five years and growing from fifteen to twenty-five
employees at this location. Based on their 2005 sales and property tax records with Harris County the
City of Pearland should receive in excess of $55,000 per year in sales taxes and approximately $6800
per year in property taxes. (This number will actually be higher with the improvements proposed. The
property itself will generate this amount of tax; Inventory taxes have not been included in these
computations.
Based on taxable sales and property taxes of $61,800 per year to the city at $225,000 grant would be
paid back in whole; some time in year four. We have used figures on grants in the past with a pay back
anywhere from six months to four years in analysis done by Impact Data Source. Impact Data Source
ran an analysis on this project when it first came to the city in July of this year. Using a discounted cash
flow analysis at a rate of 6% and a maximum of 30% of the discounted cash flow for the city over 10
years -also discounted at 6% the figures suggest an incentive range closer to $177,000 which would
make us whole in 2.8 years.
The project area is at the far northwest comer of the city. I do not see a majority of new employees
being hired as living within the city although with 10 new hires it would be safe to assume 3 might
choose to live in the city. The existing employees will for the most part remain where they currently
reside as they are traveling six or seven miles further to work. There will be no great burden on any of
our school districts as a result of this expansion.
Any incentive level approved by PEDC board above $100,000 will require approval by City Council. An
incentive agreement similar to the one recently produced for Walker Com would be very appropriate for
this project in terms of paying 40 to 50 percent upon receiving a certificate of occupancy from the city
and the balance in two annual installments provide the company continues to meet the employment
requirement (adding five employees per year to reach 25 in two years) and a level or increasing volume
of sales. Incentive level for this project is at the Board's discretion. $150,000 to $225,000 based upon
the analysis received and the excellent track record of this company would not be inappropriate.
1
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Fred Welch
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PearlandEconomic Developl11ent Corporation
Assistance Application F0D11
Applicant Information
Company Name:
Address:
Bobcat of Houston, a division of Berry Co., Inc.
8464 C:1l1f Freeway
Hom::j-nn. TX 77017 (south location)
Company Official:
Title:
Telephone:
Jonathan 'T'rlrppy
General Manager
Fi,-X:
(281) 477-8646
(281) 477-8734
Please submit third party reviewed financial statements or IRS tax filings for the 'pdor
two years. 3/31/05 certified audit enclosed with south locatlon
f'i . ,1 C! mrliled seoaratelv on 11/4/05
Project Description
Applicant MUST attach a statement fully explaining the project. Describe future site
improvements, business operations, and economic impacts of the proposed project. If the
company will be required to obtain any State or Federal permits, please detail which permits and
why they are required. The company must ask for assistance fi'om the PEDe.
Description of Facility (Select those that appl))
Corporation}{Xl Partnership ( )
Expansion ( ) Modernization ( )
Office/ Professional ( )
Acauisition and improvement of
Proprietorship ( New Plant ()
Manufacturing ( ) Sales XX)
Oth,er 1I1dustry () Distribution Center}Q{)
eXlstlng ~acillty
Project Location (Attach site plan):
14525 Almeda School Road, Pearland, TX
Total Capital Investment (Excluding Land Value): $ 600,000 + 400,000 improvements
Estimated Expenses of Bringing Utilities to Site: $ Water and sewer unavailable at this time
Building Size (Sq. Ft.): 21,250
Estimated Moving Expenses: $ 30,000
Estimated Annual Sales Tax Contribution: $ 55,000 (1 1/2% local) 76,000/yr last 12 mos
Estimated Value of Fixed Equipment: $ 25,000 now, will increase to 100,000
Sales Tax Sent to State of Texas (Last year): $ 73,356 (2% local) plus $9,600 property tax
to Harris County and school district
Company Profile: Employment:
Current Employment: 1 5
Gross Annual Payroll: $ SS:i. 220
Average Hourly Wage: $ 17 7~
Employment in 5 years: 25
Annual Payroll in 5 years: $ 1,037,700
Avg, \Vagein 5 years: $ 19.95
MINUTES OF A REGULAR MEETING OF THE PEARLAND ECONOMIC DEVELOPMENT
CORPORATION ("PEDC") BOARD OF DIRECTORS OF THE CITY OF PEARLAND, TEXAS,
HELD MONDAY, NOVEMBER 21,2005, AT 5:00 P.M., 2ND FLOOR CONFERENCE ROOM,
CITY HALL, 3519 LIBERTY DRIVE, PEARLAND, TEXAS.
I. Call To Order
The meeting was called to order at 5:03 p.m. with the following present:
BOARD MEMBERS
Chairman Randy Ferguson
Vice Chairman Steve Saboe
Secretary Helen Beckman
Board member Felicia Kyle
Board member George Sandars
Board member Lucy Stevener
Board member Ed Thompson
EX-OFFICIO BOARD MEMBERS
Chamber of Commerce
Carol Artz
City of Pearland
Bill Eisen
Not in attendance: Due to a conflict in schedule, Ex-Officio Board Member Mayor Tom
Reid was unable to attend the meeting.
STAFF MEMBERS
Executive Director
Fred Welch
Director, New Business
Development
Will Benson
Administrative Assistant
Janice Vega
Minutes of a Regular Meeting
November 21, 2005
Page 2
II. Approval of Minutes: Board member George Sandars made the motion, seconded by
Secretary Helen Beckman to approve the minutes of Public Hearing and Regular Meeting
of August 8, 2005; Special Meeting of September 13, 2005; Regular Meeting of October
3,2005; Special Meeting of October 31,2005.
Motion Passed: 7 - 0
At the Chairman's request and the Board's concurrence, Items C thru F under New
Business were moved up on the agenda.
C. CBl Presentation: Jeff Brewer with CBL gave a presentation on their proposed
project.
D. Global Entertainment: Rick Kozuback gave a presentation on their proposed joint
project with CBL.
E. Pearland Area Chamber of Commerce Contract: No action was taken.
F. Quarterly Report: Carol Artz, President of the Pearland Area Chamber of Commerce
gave a report. Report submitted to file.
EXECUTIVE SESSION UNDER TEXAS GOVERNMENT CODE
The meeting was adjourned to enter into Executive Session at 6:57 p.m.
1. Section 551.087 - Deliberations regarding Economic Development Incentives
for Prospect #0508.
2. Section 551.087 - Deliberations regarding Economic Development Incentives
for Prospect #0521.
The Board reconvened into Open Session at 7:53 p.m.
III. Monthly Financial Report: Executive Director Fred Welch gave an oral report and one
was submitted to file.
IV. Executive Director's Report: There will not be a board meeting in December. The
board will meet again in January for the board retreat.
V. Public Comments: None
VI. New Business (continued)
A. Excused Absence: Vice Chairman Steve Saboe made the motion, seconded by
Board Member Felicia Kyle to excuse the absence of Board Member Lucy Stevener
from the Regular Meeting of October 3,2005.
Motion Passed: 6. 0
Abstained: Lucy Stevener
Minutes of a Regular Meeting
November 21, 2005
Page 3
B. Excused Absence: Board Member George Sandars made the motion. seconded by
Vice Chairman Steve Saboe to excuse the absence of Secretary Helen Beckman and
Board Member Felicia Kyle from the Special Meeting of October 31, 2005.
Motion Passed: 5 - 0
Abstained: Helen Beckman and Felicia Kyle
G. Economic Development Incentives - Prospect #0508: Board Member Felicia
Kyle made the motion, seconded by Vice Chairman Steve Saboe to approve an
incentive grant in an amount of $166,000.00 for Prospect #0508.
Motion Passed: 7 - 0
H. Economic Development Incentives - Prospect #0521: Board Member Felicia
Kyle made the motion, seconded by Secretary Helen Beckman to deny the request
for economic development incentives for Prospect #0521.
Motion Passed: 6 - 0
Abstained: Steve Saboe
I. PEDe Board Retreat: Board Member George Sandars made the motion,
seconded by Board Member Felicia Kyle to set the date for the Annual PEDC Board
Retreat for Friday, January 27,2006, at 10:00 a.m.
Motion Passed: 7 - 0
VII. Adjournment: Board Member Felicia Kyle made the motion, seconded by Vice
Chairman Steve Saboe to adjourn the meeting.
Motion Passed: 7 - 0
Minutes approved as
~r
submitted and/or corrected this
, A.D., 2006.
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day of
ATTEST:
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f Helen Beckman, Secretary
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