09-JS Baking LLC Tax Abatement Amendment

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Item No. 9 memorandum TO: Mayor and City Council John Godwin, City Manager FROM: Stephanie H. Harris, City Attorney SUBJECT: Addendum to Tax Abatement Agreement with JS Baking, LLC ( "Skinner ") DATE: April 4, 2017 BACKGROUND: On April 22, 2013, Council approved a tax abatement agreement with JS Baking, LLC ( "Skinner ") relating to its purchase of the former Sarah Lee plant on NE Loop 286. The agreement was for a 100% abatement of taxes on the improvements set out in the agreement for a period of 10 years. As consideration for the abatement, Skinner was to invest $19,400,000.00 in the plant and to employ full time workers as follows: 100 by the end of 2013, 200 by the end of 2014, and 393 by the end of 2017. Due to setbacks at the plant related to the loss of a large account, Skinner has requested that Council approve an addendum which reduces their total required investment to $15,617,000.00 and reduces their required employment levels as follows (such levels reflecting their actual employee count for the respective years to date): 117 employees by the end of 2013, 93 by the end of 2014, and 116 by the end of 2017. The attached addendum to the 2013 agreement reflects those changes and corrects the name of the company which had incorrectly been identified as "The James Skinner Co." in the original agreement. STATUS OF ISSUE: Pending City Council approval of tax abatement agreement addendum. BUDGET: No additional budgetary impact than that related to the original abatement agreement. RECOMMENDATION: Motion to approve resolution approving "Addendum to Tax Abatement" between the City of Paris and JS Baking, LLC.