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CITY COUNCIL AGENDA COMMUNICATION |
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| | | | | | | | AGENDA DATE: | JuneĀ 13, 2017 |
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| | | | | | | | SUBJECT: | Authorize the City Manager to Execute an Economic Development Incentive Agreement with NetScout Systems Texas, LLC. |
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| | | | | | | | STAFF RESOURCE: | Dan Bowman, Executive Director/CEO Allen Economic Development Corporation |
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| | | | | | | | BOARD / COMMISSION ACTION: | On March 15, 2017, the Board of Directors of the Allen Economic Development Corporation voted unanimously to authorize the AEDC Executive Director to negotiate and execute an Economic Development Agreement with NetScout and to recommend that the Allen City Council provide a 10 year, 50% tax abatement or equivalent to NetScout. |
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| | | | | | | | ACTION PROPOSED: | Authorize the City Manager to Execute an Economic Development Incentive Agreement with NetScout Systems Texas, LLC. |
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| | | | | | | | BACKGROUND
The Allen Economic Development Corporation (AEDC) has negotiated the
recruitment of NetScout Systems Texas, LLC to locate in Watters Creek Office Park near
the northwest corner of Bethany Drive and US 75. The company will lease
over 145,000-square feet of space in a new three story office building to be
constructed on the northern portion of the office park.
NetScout plans to relocate
approximately 540 employees with an average annual salary of $138,000 to the
facility and cause construction of a new building with an investment in real
and business personal property estimated at $55 million. The project is
estimated to generate over $12.3 million in tax revenues to local taxing
entities over the next 10 years, based on an economic impact analysis
completed by the AEDC.
The AEDC Board of Directors
authorized an economic development incentive from the AEDC to assist with the
project. During the course of negotiations, it was determined that a Chapter 380
Economic Development Incentive Agreement from the City of Allen to provide the
equivalent of a 10 year, 50% tax abatement would play a critical role in
recruiting the project to Allen.
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| | | | | | | | BUDGETARY IMPACT
Based on a minimum required taxable value of $40 million, annual property tax revenue generated by the project to the City of Allen is estimated to be $208,000. The annual reimbursement from the City of Allen to NetScout in the form of this Chapter 380 Economic Development Incentive Agreement (equivalent to a tax abatement) is estimated at $104,000 per year.
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| | | | | | | | STAFF RECOMMENDATION
Staff recommends authorizing the City Manager to execute an Economic Development Incentive Agreement with NetScout Systems Texas, LLC.
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| | | | | | | | MOTION
I make a motion to authorize the City Manager to execute an Economic Development Incentive Agreement with NetScout Systems Texas, LLC.
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