AGENDA CAPTION:
Title
Consider approval of Resolution 2022-200R, approving a Chapter 380 Economic Development Incentive Agreement with Majestic Realty Co. providing incentives in the form of refunds of 50 percent of additional real property taxes for up to three years per building for the construction of industrial lease space on Centerpoint Road, to the extent such space remains unleased; authorizing the City Manager, or her designee, to execute said agreement; and declaring an effective date.
Body
Meeting date: September 6, 2022
Department: City Manager’s Office - Economic Development
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Fiscal Note:
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City Council Strategic Initiative: [Please select from the dropdown menu below]
Economic Development
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Comprehensive Plan Element (s): [Please select the Plan element(s) and Goal # from dropdown menu below]
☒ Economic Development - Diverse Local Economic Environment
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Background Information:
This project was previously titled “Project Thin Mint.” MW Gas Lamp Industrial Park JV, LLC is proposing to construct Class A speculative industrial space located at Centerpoint Rd. and Wassar Blvd. This project will be constructed over multiple phases beginning in Q1 2024 with completion by Q4 of 2033. The capital investment is $103 million, and the maximum length of the agreement is 10 years.
The proposed incentive is a rebate of up to 50% of real property taxes over a three year period per building. All rebates will only be for unoccupied portions of the buildings as of December 31 annually. As the facilities lease space to tenants, the value of the property tax that is rebated will decrease accordingly.
This project received a score of 74.5 points per the Economic Development Policy for incentives which provides up to 70% of the net present value of the estimated total tax liability for up to 10 years. Economic Development San Marcos (EDSM) Board voted 8-0 to recommend City Council consider a Chapter 380 Agreement with Project Thin Mint for each of their phases with a tax rebate over the duration of three years per phase.
Council Committee, Board/Commission Action:
Economic Development San Marcos (EDSM) Board voted 8-0 on May 26, 2022, to recommend City Council consider a Chapter 380 Agreement with Project Thin Mint for each of their phases with a tax rebate over the duration of three years per phase. The recommended agreement would provide a rebate of 100% in year one, 75% in year two, and 50% in year three and would only be in place for unoccupied portions of the building.
Alternatives:
City Council may choose to deny the incentive request or to change the percentages of the incentive or length of term.
Recommendation:
Staff recommends approval as presented.