13 - Terminating Tax Abatement dated 11-24-2008 with Campbell Soup related to the Multi-Serve Beverage Line

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Item No. 13 memorandum TO: City Council John Godwin, City Manager FROM: Stephanie H. Harris, City Attorney SUBJECT: Documents amending and terminating 2008 Tax Abatement Agreement with Campbell Soup Supply Company LLC relating to the Multi -Serve Beverage Line DATE: July 16, 2019 BACKGROUND: ON June 20, Council directed me to prepare documents to amend and terminate the November 24, 2008 Tax Abatement Agreement with Campbell Soup related to their Multi -Serve Beverage Line (also known as the "Fusion Line"). As you will recall, Campbell Soup is ceasing operations of the Fusion Line due to prevailing conditions in the industry, but has repurposed much of the machinery and equipment for their sauce production line. The changeover from the Fusion Line to sauce production should be workforce neutral. STATUS OF ISSUE: Council will need to approve two documents: 1. An Addendum to Tax Abatement Agreement to amend the Fusion Line agreement to reflect actual investment and employment levels so that Campbell Soup is not in default. 2. An Agreement to Terminate Tax Abatement Agreement Dated November 24, 2008 Between the City of Paris, Texas and Campbell Soup Supply Company LLC so that the Fusion 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 2008 agreement that remains in the plant to be repurposed, nor will Campbell Soup have to reimburse any property taxes already abated under the agreement. BUDGET: The city will receive tax revenues on Fusion Line equipment remaining in the plant due to the termination of the agreement a year before it was set to expire. Additionally, Campbell Soup has made an additional capital investment of approximately $10,000,000.00 on the sauce line for which it has not sought a tax abatement, so there will be tax revenues associated with that additional investment. RECOMMENDATION: Approve a resolution approving the execution of agreements to amend and terminate the 2008 tax abatement agreement with Campbell Soup Supply Company LLC relating to the Multi -Serve Beverage Line.