Consider and take appropriate action on Chapter 380 Economic Development and Performance Agreement between the City of Kaufman, Texas and Lowe's Companies, Inc.; and authorizing the Mayor to execute necessary documents.

Staff Report & Agenda Item Details

As part of the site selection of Lowe’s in Kaufman, it was negotiated to assist with half of their site infrastructure costs. The costs of this infrastructure (utilities, detention pond, parking lot, etc.) total $6,830,000. The 380 Agreement between the City and Lowe’s would provide an annual grant to Lowe’s based on 3/4-cent of the 1 penny general fund sales tax levied, not to exceed $3,415,000 (50% of costs). The 380 Agreement stipulates this grant will be processed annually following collection of all sales tax by Lowe’s for the prior year. The contract has a timeline of 15 years to give time for the store to meet the threshold of $3.415 million, however, based on similar stores, it’s anticipated this grant will last approximately 10 years. Lowe’s will have to pull permits by September 30, 2025 and open no later than January 31, 2027. A provision is also in the agreement that stipulates should Lowe’s close the store within 24 months following their final grant, they will have to repay the City of Kaufman 50% of their total benefit. They will be required to submit an annual compliance report to the City, as well. They will, in good faith, create community partnerships with local organizations and work with the City to potentially negotiate a procurement agreement. During the course of the agreement, the City will receive sales tax revenue outside of the grant agreement at the following: 0.25% General Fund, 0.25% Street Maintenance, 0.5% Property Tax Reduction. The KEDC will also receive 0.25%. Based on an estimated $50 million in annual taxable sales, this will generate $625,000 plus all ad valorem revenue.

This motion is scored as EXPANDS_GOVERNMENT (Impact Weight: 7.5/10). Under the Bastiat Liberty Watchdog Index, measures that increase tax rates or fee schedules, issue new debt or Certificates of Obligation, expand regulatory/zoning restrictions on private land use, or authorize unbudgeted spending expansions reduce an official's Freedom Score when voted YES (and reward dissenting NO votes).