On November 6th, 2012 the City of Schertz (the “City”), the Schertz Economic Development Corporation (the “SEDC”), Guadalupe County (the “County”) and Amazon.com.kydc LLC (“Amazon”) entered into an Economic Development Incentive Agreement (Agreement). Under the Agreement, Amazon agreed to construct a 1,261,980 square foot facility, make a $166 million capital investment, maintain at least $125 million of Taxable Property, and employ at least 350 full-time employees with at least $11 million in Annual Payroll by the end of 2013. In consideration of the project, the City, County, and SEDC agreed to provide a rebate structured development incentive package. The Agreement also provided for a Sales Tax Grant if Amazon generated at least $100 million in Project Taxable Sales.
In May 2019, Amazon reported a Taxable Property of One Hundred Twenty-Four Million, Six Hundred-Eight Thousand, Three Hundred Forty-Five and No/100 Dollars ($124,608,345.00) which is below the minimum requirement of at least One Hundred Twenty-Five Million and No/100 Dollars ($125,000,000.00), which absent this Amendment, would create a default under the Agreement (the “Taxable Property Shortfall”)
PROPOSED AMENDMENT
The Amendment includes the following components:
- Amazon reported a Taxable Property of $124,608,345 which is below the required $125 million triggering a default of the agreement
- A safe harbor has been created to allow Amazon to remain compliant to the agreement if they have a Taxable Property value over $120 million. They will only get the grant if they are in excess of the original amount of $125 million.
- The Term of the agreement has been extended from December 31, 2024 to September 30, 2028. ***NO other changes were made to the incentive payout periods***
- An Operational Requirement has been added from January 1, 2025 to September 30, 2028. Amazon will only be required to occupy the facility. There will be no jobs, payroll or investment commitment.
- Other minor changes were made to clean up the agreement, i.e. notices and several recitals to clarify some procedural issues.
FISCAL IMPACT
Developer will remain compliant to the Agreement but will not be eligible to receive a 2018 City Property Tax Incentive of an estimated payment in the amount of $374,036.00 (60% of taxes paid to the City). The developer will not receive the 2018 County Property Tax Incentive.
GUADALUPE COUNTY APPROVAL
Guadalupe County Commissioners met on October 1, 2019 and approved Amendment No. 3 to the Economic Development Incentive Agreement with Amazon.com Services. |