23 - Tax Abatement Agreement for Lionshead Speciality Tire & Wheel

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Item No. 23 TO: City Council Gene Anderson, Interim City Manager FROM: Stephanie H. Harris, City Attorney SUBJECT: Tax Abatement Agreement for Lionshead Specialty Tire & Wheel, LLC DATE: January 22, 2020 BACKGROUND: On December 9, 2019, the City Council directed me to prepare a tax abatement agreement for a new tax abatement with Lionshead Specialty Tire & Wheel, LLC ("Lionshead"). Lionshead is an Indiana corporation new to Paris which plans to build an assembly and warehousing plant for its business of assembling tire and wheel assemblies on property currently owned by the Paris Economic Development Corporation in the Northwest Business Park on NW Loop 286. PEDC will be entering a performance agreement with Lionshead as well by which PEDC will be conveying the property to Lionshead subject to performance standards and claw back provisions. The improvements, which will come in at a total cost of between approximately $6,000,000.00 and $8,200,000.00, will necessitate the hiring of at least 18 employees in the first three years of the agreement, and the agreement requires that those employees be retained throughout the remainder of the agreement as well. The abatement is for 7 years and will be granted on a de-escalating basis: 100% for the first two years, 75% years 3 and 4, 50% for years 5 and 6, and 25% for year 7. The abatement expires on December 31, 2027. STATUS OF ISSUE: Pending City Council approval of tax abatement agreement. BUDGET: Seven year abatement on the improvements set out in the Agreement. RECOMMENDATION: Motion to adopt a resolution approving tax abatement agreement between City of Paris and Lionshead Specialty Tire & Wheel, LLC in substantial conformance with the attached agreement and authorize the mayor to execute same on behalf of the city.