Authorize Execution of Economic Development Program Agreement with Parker-Hannifin Corporation for a Manufacturing and Office Consolidation Located at 4701 Mercantile Drive (COUNCIL DISTRICT 4)

It is recommended that the City Council:

1.  Authorize the City Manager to execute an Economic Development Program Agreement with Parker-Hannifin Corporation for the consolidation of existing business operation into a 242,000 square foot expansion to support increasing business needs at 4701 Mercantile Drive; and

2.  Find that the terms and conditions of the Agreement, as outlined below, constitute a custom-designed Economic Development Program, as recommended by the 2016 Comprehensive Plan and authorized by Chapter 380 of the Texas Local Government Code.

Parker-Hannifin (Company) is a global diversified manufacturer of motion and control technologies and systems that is looking to consolidate two business operations, including a manufacturing component in Fort Worth, by creating a world-class divisional headquarters facility. Company will renovate an existing call center facility and expand it into a 242,400 square foot office and manufacturing facility to house Parker's Stratoflex Divisional Headquarters, located at 4701 Mercantile Drive. Company will make a capital investment of at least $25.5 million in real and business personal property improvements (exclusive of land costs) by December 31, 2017.  

The Company will spend or cause to be expended the greater of 20 percent or $4,340,000.00 of all hard construction costs with Fort Worth companies, and will spend or cause to be expended the greater of 15 percent or $3,255,000.00 of all hard construction costs with companies that are Fort Worth Certified Minority/Women Owned Business Enterprise companies

The Company will also retain 525 full-time equivalent (FTE) positions on the property by December 1, 2018. The Company will fill a minimum of 40 percent of all FTEs with Fort Worth residents and a minimum of 20 percent of all FTEs with Fort Worth Central City residents.

The Company will spend the greater of 35 percent or $1,400,000.00 in annual discretionary service and supply expenses with Fort Worth  companies, and the greater of 20 percent or $800,000.00 in annual discretionary service and supply expenses with companies that are Fort Worth Certified Minority/Women Owned Business Enterprise companies

In return, the City will pay the Company 10 annual Economic Development Program grants, as authorized by Chapter 380, Texas Local Government Code. The maximum annual program grant will be equal to 60 percent of the incremental value of real and business personal property taxes on the development. Staff recommends entering into an Economic Development Program Agreement with the Company for this project.

Except for cases of default, failure to meet a particular commitment will result in a reduction to the grant amount that Developer is entitled to receive in a given year based on the value assigned to the commitment in accordance with the following chart: