11 - TAX ABATEMENT AGREEMENT WITH KIMBERLY-CLARK CORP

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Item No. 11 memorandum TO: City Council John Godwin, City Manager FROM: Stephanie H. Harris, City Attorney SUBJECT: Tax Abatement Agreement for Kimberly-Clark Corporation DATE: September 19, 2017 BACKGROUND: On August 28, 2017, the City Council directed me to prepare a tax abatement agreement for a new tax abatement with Kimberly-Clark Corporation. Kimberly-Clark plans to make improvements and replacements to existing equipment in its Personal Care Division, which manufactures disposable diapers, training and youth pants and swim pants. The improvements, which will be made over a period of five years with a total cost of approximately $121,000,000.00, are designed to significantly enhance Kimberly-Clark's machinery and equipment to keep the Plant's diaper and pant production lines state-of-the-art in efficiency, speed and quality so as to allow the Plant to remain competitive with competing product offerings in the market. The abatement is for 100% for ten years, but only the improvements completed in 2018 will receive the benefit of all ten years of the abatement. The number of years of abatement will decrease for improvements made in the successive calendar years, with the improvements made in 2022 receiving an abatement of 6 years. A table setting out the number of years abatement for the improvements made in each of the 5 years is set forth on page three of the attached Agreement. In addition, because Kimberly-Clark's depreciation schedule is longer than 10 years, all of the improvements made under this Agreement will have taxable value at the end of the 10 year abatement period. STATUS OF ISSUE: Pending City Council approval of tax abatement agreement. BUDGET: Ten year abatement on the improvements set out in the Agreement. RECOMMENDATION: Motion to approve tax abatement agreement between City of Paris and Kimberly-Clark Corporation.