Title
Consider/Discuss/Act on An Ordinance Amending the Area Comprising Reinvestment Zone No. 25 for TRAXXAS, L.P. and Approving the Terms and Conditions of an Amended Tax Abatement Agreement and the Execution thereof by the City Manager
Summary
MEETING DATE: July 17, 2012
DEPARTMENT: City Manager
CONTACT: Jason Gray, City Manager
RECOMMENDED CITY COUNCIL ACTION:
· Approval
ITEM SUMMARY:
· If approved, this ordinance will increase the size of an existing Reinvestment Zone for the TRAXXAS, L.P. project from 12.0 to 13.03 acres and amend certain terms in the related tax abatement agreement.
· Traxxas, L.P. has requested an amendment to its existing tax abatement agreement due to project construction delays outside of its control. Traxxas has also requested an amendment to the configuration of its Reinvestment Zone to allow the zone to better encompass the buildings and improvements planned for its corporate headquarters, generally located at Stacy Road and Henneman Way, just north of the Sam Rayburn Tollway. The construction delays have necessitated a request to change the valuation conditions in the tax abatement agreement, from $12,000,000 to $10,000,000 on January 1, 2013; then increasing same back to $12,000,000 on January 1, 2014, and continuing thereafter for all abatement years. There are also new deadlines on TRAXXAS' receipt of certificates of occupancy on its office building and distribution building in 2013. The tax abatement agreement would allow for a 50% abatement in up to 8 of 10 years, if all conditions are met.
BACKGROUND INFORMATION:
· TRAXXAS, L.P. announced the relocation of its corporate headquarters from Plano to McKinney in 2010. The company is a manufacturer and worldwide distributor of electronically-controlled, miniature cars/trucks which are competitively raced in various racing circuits around the world. These products are also sold to recreational collectors/users, as well.
FINANCIAL SUMMARY:
· The final valuation of the taxable assets (building improvements, equipment and inventory) of the company as of each Tax year will determine whether the tax abatement will be granted for TRAXXAS in such year(s).
BOARD OR COMMISSION RECOMMENDATION:
· N/A