Agenda

Back to Calendar Return

City Council Regular Meeting

Meeting Date:

02/08/2022

BACKGROUND

Sysco is the global leader in selling, marketing and distributing food products to restaurants, healthcare and educational facilities, lodging establishments and other customers who prepare meals away from home. Its family of products also includes equipment and supplies for the foodservice and hospitality industries. With more than 58,000 associates, the company operates 343 distribution facilities worldwide and serves more than 650,000 customer locations. For fiscal year 2021 that ended July 3, 2021, the company generated sales of more than $51 billion.

In 2012 Sysco established Sysco Central Texas at 1260 Schwab Rd, in Schertz. The existing facility employs approximately 450 team members supporting operations that have resulted in over $100,000,000 in real and personal property investment per the Comal County Appraisal District as of 2021. Sysco is a model corporate partner and has consistently participated in workforce development events such as Job Shadow Day and other community events. To meet increasing demand in the South Texas market Sysco is seeking to expand its Schertz facility.

Approval of Resolution 22-R-15 provides authorization for funding for a three-year 50% rebate on the incremental value of the project expansion. The grant will be capped at up to $25,000 per year or 50% of the incremental value (whichever is less) of the improvement using calendar year 2021 as the base year. Grant is payable annually based on satisfactory performance based on Performance Table A. Unsatisfactory performance may result in withholding of payment or recapture of grant funds paid and/or termination of the agreement.

Performance Table A

Performance Period Jan 1 - Dec 31	Existing Jobs	New Jobs	Total Jobs at an Avg of $70K	Total Minimum Payroll	Real Property Investment	Personal Property Investment	Proposed Incremental Value Rebate
Yr. 0 – 2022	450			$24.8M	$10M	$2.6M
Yr. 1 – 2023		8	458	$25.2M			50%
Yr. 2 – 2024		8	466	$26.1M			50%
Yr. 3 – 2025		8	474	$26.5M			50%
Yr. 4 – 2026		8	482	$27M
Yr. 5 – 2027		8	490	$27.4M

On Thursday, January 27, 2022 the SEDC Board of Directors approved the attached SEDC Resolution 2022-1 recommending funding of the attached agreement between the SEDC and Sysco Corporation.

GOAL

To grow the Schertz economy through Projects that focus on the creation/retention of Primary Jobs through partnerships with local industrial Fortune 500 companies to lower cost of expansion, making Schertz a community of choice for new investment and job creation.

COMMUNITY BENEFIT

This action helps to secure additional jobs, investment, and expansion prospects for the community through a partnership with Sysco Corporation. Securing and maintaining working relationships with local Fortune 500 companies helps to ensure Schertz is a community of choice for future expansions and/or follow-on investment and job creation. In addition, entering into partnerships to lower expansion costs continues to be an essential tool for communities to remain competitive as corporations respond to the post-COVID market with expansions and consolidation activity.

SUMMARY OF RECOMMENDED ACTION

SEDC Staff recommends approval of Resolution 22-R-15 authorizing funding Agreement between Sysco Corporation and the City of Schertz Economic Development Corporation.

FISCAL IMPACT

An annual grant of up to $25,000 (totaling up to $75,000 over the course of the agreement) will be paid through an allocation to the annual incentive budget from the SEDC Reserve Fund.

RECOMMENDATION

Staff recommends approval of Resolution 22-R-15 authorizing a program and expenditures as provided for in the Economic Development Performance Agreement between Sysco Corporation and the City of Schertz Economic Development Corporation.

Attachments
SEDC Resolution 2022-1
Resolution 22-R-15
SEDC/Sysco Performance agreement