10-12 Memo - Campbell Soup Tax Abatement Agreements

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Item Nos. 10-12 TO: City Council John Godwin, City Manager FROM: Stephanie 11. Flards, City Attorney SUBJECT: DOCLInients amending and terminating 2013 Tax Abatenient Agreement with Campbell Soup Supply Company LLC relating to, the Single Serve Beverage Line and adopting a new Tax Abatement Agreement with Campbell Soup relating to its new Plum Organics Manufacturing Line. DATE: October 17, 2017 BACKGROUND: In August of this year, Council directed me to prepare documents to terminate the February 25, 2013 Tax Abatement Agreement with Campbell Soup related to their Single Serve Beverage Line ("SSB I.,ine") and to enter a new Tax Abatement Agreement with the company related to its new Plum Organics Manufacturing Line ("Plum Line)." As you will recall, Campbell Soup is ceasing operations of the SSB Line due to prevailing conditions in the industry, but is replacing that line with the new Plum. Line which will manufacture organic baby and toddler food and the like in S011 Pouches. There will be a small net gain in jobs over those currently associated with the SSB line as a result of the changeover. STATUS OF ISSUE: Council will need to approve three documents: 1. An Addendum to Tax Abatement Agreement to amend the SSB Line agreement to reflect Current employment levels so that Campbell Soup is not in default. 2, An Agreement to Terminate "Fax Abatement Agreement Dated February 25, 2013 Between the City of Paris, Texas and Campbell Soup Supply Company Ll...0 so that the SSB Line agreement is terminated and neither party has any further obligations under that agreement, There will be no further tax abatement on equipment covered by the 2013 agreement that remains in the plant to be repurposed, nor will Campbell Soup have to reimburse any property taxes already abated under the agreement. 3. Tax Abatement Agreement related to the new Plum Line. This is a 10 year abatement at 100%. The company will be required to invest a minirm.11-ri of$28,500,00,00 and LIP to $33,800,00.00 at the plant related to the Plum Line and to add no fewer than 40 employees and up to 49 related to the Plum Line. BUDGET: The City will not receive tax revenue on the new investment for a ten year period. RECOMMENDATION: Approve and adopt, in three separate motions, resolutions to adopt the above -referenced agreements.