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  3.       
City Council Regular Meeting
Meeting Date: 04/26/2022  

BACKGROUND
On February 8, 2022, City Council conducted a Public hearing and consideration and/or action adopting a resolution nominating Sysco USA I, Inc. as an Enterprise Zone Project under the provisions established in State Law and Chapter 21 of the Code of the City of Schertz.
The project passed unanimously and was submitted to the State of Texas on behalf of the company by the project consultant Deloitte on March 1, 2022.

On Friday, April 15, 2022, the State of Texas Office of Economic Development and Tourism informed the Schertz Economic Development Corporation (SEDC) that the nominating resolution required a termination date to be explicitly included in the Resolution language.
If this action is not approved, it will cause the Enterprise Project application submitted by Sysco to be rejected and a new application will have to be submitted on behalf of the company.

The following is the Background of the February 8 adoption:

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
The Goal of the February 8th action was 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. Adoption this administrative correction to 22-R-16 ensures successful consideration of the Sysco USA I, Inc. State Enterprise Zone Project nomination.
COMMUNITY BENEFIT
This benefit of the February 8th 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. This amendment ensures the project is considered by the State of Texas.
SUMMARY OF RECOMMENDED ACTION
Provides for an administrative amendment to Resolution 22-R-16 passed by the City Council on February 8, 2022, which nominated Sysco USA I, Inc. as an Enterprise Zone Project and addresses a deficiency letter received by the Governor’s Office of Economic Development and Tourism on April 15, 2022.
FISCAL IMPACT
There is no fiscal impact to the City of Schertz as this amendment completes the nomination process for a project designation that may result in State of Texas sales tax refund. No local funding is used to fund this incentive. 
RECOMMENDATION
Staff recommends approval of Resolution No. 22-R-16, as amended, nominating Sysco USA I, Inc. as an Enterprise Zone Project
Attachments
Resolution 22-R-16 - Original
Resolution 22-R-16 - amended

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