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  Agenda Item 8.       
Meeting Date: 10/17/2017  
Item Title:    Request for Development Assistance from Nutribiotech USA Inc.
Submitted By: David Gwin
Council Goal: Sustainable Quality Development and Redevelopment

ISSUE
Consider a development incentive request from Nutribiotech USA Inc. for a partial rebate of applicable Real Estate (RE) and Business Personal Property (BPP) tax required of a proposed expansion project for a specific period of time.
OPTIONS
1) Approve the staff recommendation for a partial rebate of the applicable RE and BPP tax for a specified period of time
2) Not approve a rebate of the applicable RE and BPP tax
RECOMMENDATION
The City would provide a thirty percent (30%) rebate on the ad valorem tax attributed to new RE value for the 2020 through 2025 tax years and a forty percent (40%) rebate between 2020 through 2022 and a thirty percent (30%) rebate between 2023 through 2025 on the ad valorem tax associated with new BPP value upon the company meeting and sustaining the following performance requirements:

1) Maintain the existing manufacturing operation and taxable valuation at 3366 Miller Park South;
2) Purchase 11.5 acres located at 1102 South Jupiter Road and minimally construct a new facility of 250,000 square feet on that parcel;
3) Purchase 18.9 acres located at 1200 South Jupiter Road and renovate 375,000 square feet of existing space on that parcel; and
4) Add a minimum of $57 million in new RE valuation and $25 million in new BPP valuation per the established schedule.
BACKGROUND
Nutribiotech USA Inc., a South Korean-based company, purchased its current location on Miller Park South and began operations in 2015.  In 2016, they completed a 10,000 square foot expansion at the same location.  The Garland location represents their North American headquarters and it currently provides full research and development capabilities for their product lines.  

With an ever-aging population and much greater health awareness in general, the USA represents the largest worldwide market for nutritional and dietary supplements.  Responding to this ever growing demand, the company proposes to add 600,000 square feet to their operational footprint by 2021.

Toward that end, the additional 30.4-acres recently secured by Nutribiotech was originally part of the 110-acre Raytheon campus.  As agreed, the project is comprised of several phases to be completed over the next five years and it includes renovating three buildings totaling 375,700 square feet of existing space for office and warehouse operations and constructing a 250,000 square feet new US headquarters facility.
CONSIDERATION
Nutribiotech USA Inc. has been successfully operating in Garland since 2014.  They are a high-volume contract manufacture producing dietary supplements which is considered part of the City's targeted food industry cluster.  This project will add $25 million in BPP valuation by 2020 and $57 million in RE valuation by 2021.  Additionally, the company will create 1,640 new full-time jobs with over $42 million in additional annual payroll. 
 
Attachments
Proposed Economic Development Incentive Agreement


    

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