Agenda

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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 serving much of South Texas. The current operation currently employs approximately 450 team members with an operation that has 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-16 nominates Sysco USA I, Inc., a wholly-owned subsidiary of Sysco Corporation, for a State Enterprise project designation through the Texas Enterprise Zone Program.

The Texas Enterprise Zone Program is a state sales and use tax refund program designed to encourage private investment and job creation in economically distressed areas of the state. Texas communities must nominate companies in their jurisdiction to receive an Enterprise Zone designation and thus be eligible to receive state sales and use tax refunds on qualified expenditures. Companies must meet minimum capital investment thresholds and create and/or retain jobs that employ a certain percentage of economically disadvantaged individuals, enterprise zone residents, or veterans. A community with less than 250,000 in population, may have up to six enterprise project nominations in a single biennium.

GOAL

To grow the Schertz economy through Projects that focus on the creation/retention of Primary Jobs. Projects include 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

Approval of Resolution 22-R-16 will use one of six State Enterprise Project nominations to nominate the Sysco USA I, Inc. expansion to the State of Texas for consideration under the Texas Enterprise Zone Program. The State of Texas will consider this project against other projects across the State for an Enterprise Project designation which would make the project eligible to potentially receive a sales tax refund. If the project is successful it could qualify for a sales tax refund from the State of Texas (not City of Schertz sales tax) based on jobs, wages, and investment.

FISCAL IMPACT

There is no fiscal impact to the City of Schertz as this project designation may result in State of Texas sales tax refund. No local funding is used to fund this incentive.

RECOMMENDATION

Staff recommends approval of Resolution 22-R-16 nominating Sysco USA I, Inc. for a State Enterprise Project designation.

Attachments
Resolution 22-R-16