CITY COUNCIL AGENDA ITEM
Memo Date: March 13, 2024
Agenda Date: March 26, 2024
Prepared By: Samantha Senger, Director of Communication and Economic Development
Through: Stockton Whitten, City Manager
Requested Action:
title
Approval of the 2023 AVT exemption for Walmart based on the fulfillment of all the requirements of the Ad Valorem Tax Abatement Economic Incentive Agreement by maintaining 239 jobs at an average annual wage above $42,421.
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BACKGROUND:
An Ad Valorem Tax Abatement Economic Development Incentive Agreement (AVT) was executed, on June 30, 2016, in which Wal-Mart Stores East, LP agreed to purchase approximately 270 acres of land in the City to develop a 460,000 square foot refrigerated warehouse and distribution center. The center was to create 239 jobs at an average annual wage of $42,421 by December 31, 2020 and generate approximately $96.2 million in new private capital investment ($84.2 million in building construction and $12 million in machinery and equipment), excluding land costs.
The AVT was approved for 40% ad valorem tax abatement for 5 years and a $2 million cash incentive. The AVT credits are estimated to total $1 million.
A condition of the ordinance granting the Ad Valorem Tax Abatement calls for the creation of 239 jobs with an average annual salary of at least $42,421 by December 31, 2020. As of December 31, 2020, the Walmart Regional Distribution Center had hired 239 employees. The average annualized wages for these employees was $49,346. Thus, Walmart qualified for the tax abatement for 2020 and has continued to meet all of the requirements of the AVT allowing them to receive tax abatements for 2021. The average salary for the 239 employees in FY 2022 was $64,873 and in FY 2023 was $61,487. FY 2023 is year 5 of the 5-year tax abatement program.
Walmart currently has 615 full and part-time employees of which approximately 23.9% of them have a Cocoa address. This is down from 688 full and part-time employees that they had in early 2023, but far exceeds what is required for the Ad Valorem Tax Abatement.
Walmart is also bound by a Development Order approved by the City Council on March 14, 2017. The site has approximately 140 acres for additional development and the Development Order provides for the donation of a one-acre parcel to the City for municipal purposes. Staff has been coordinating with Walmart officials on the conveyance of this parcel which should be complete soon. The once acre will be on the far north-east corner of the property and can be used to assist FDOT with construction needs during the SR524 expansion project.
STRATEGIC PLAN CONNECTION:
Wal-Mart Stores East, LP has a direct connection to the Economic and Community Development priority area. It has increased the City’s economic position within the Space Coast and has provided the City with a competitive edge in attracting other like projects that facilitate additional private capital investment and expansion of complementary businesses. In addition, Wal-Mart has been retaining and expanding job opportunities.
BUDGETARY IMPACT:
ESTIMATED Tax Year 2023 for the Wal Mart Distribution Center:
|
TYPE |
MILLAGE |
ASSESSED |
EXEMPTION |
TAXABLE |
TAX |
|
Tangible |
6.9532 |
9,760,100 |
4,067,984 |
5,692,116 |
$39,578.42 |
|
Property |
6.9532 |
87,104,030 |
31,518,700 |
55,585,330 |
$386,495.92 |
Assessments:
Fire $169,086.34
Stormwater $79,642.17
Solid Waste Disposal $42,336.12
|
YEAR |
PERCENT |
Reporting YR/ Budget YR |
Tangible Property Exemption |
Real Estate Exemption |
TPP Exemption |
Total Abatement |
Tax Rate |
|
1 |
40% |
2019/2020 |
$5,225,840 |
$26,842,970 |
$25,000 |
$32,093,810 |
5.979 |
|
2 |
40% |
2020/2021 |
$4,580,884 |
$28,664,640 |
$25,000 |
$33,270,524 |
5.979 |
|
3 |
40% |
2021/2022 |
$3,947,912 |
$28,564,640 |
$25,000 |
$32,537,552 |
6.4532 |
|
4 |
40% |
2022/2023 |
$4,042,984 |
$31,758,980 |
$25,000 |
$35,826,964 |
6.4532 |
|
5 |
40% |
2023/2024 |
$4,042,984 |
$31,518,700 |
$25,000 |
$35,586,684 |
6.9532 |
PREVIOUS ACTION:
On November 8, 1995, the City of Cocoa voters authorized the City Council to consider granting economic development ad valorem tax exemptions to new and expanding businesses.
On May 28, 1996, the City Council adopted Resolution No. 96-24 that established the application and review requirements and procedures for an AVT program. It was initially approved by and has since been reauthorized (by the voters) for additional ten-year periods, with the most recent
On November 8 2005, voters extended the AVT program for an additional 10 years from 2015 through 2025.
On February 11, 2014, the City Council adopted Resolution 2014-18 that repealed Resolution No. 96-24 by updating procedures for granting economic development ad valorem tax exemptions.
On May 24, 2016, City Council approved Ordinance 12-2016 granting the project an Ad Valorem Tax Abatement of 40% for 5 years. City Council approved an economic cash incentive for $2,000,000 to be awarded in $500,000 increments upon completion of the specified benchmarks and authorized the City Manager to execute an Economic Development Incentive Agreement.
On June 30, 2016, The City of Cocoa executed an Ad Valorem Tax Abatement Economic Incentive Agreement with Wal-Mart Stores East, LP.
On March 14, 2017, City Council approved an amended and restated the City of Cocoa Development Order Related to the Brevard Crossings Regional Activity Center for Cocoa Logistics and Business Center.
On June 26, 2019, City Council approved the $2 million incentive to Wal-Mart Stores East, LP for meeting the December 31, 2018 benchmarks noted in the Ad Valorem Tax Abatement Economic Incentive Agreement. The City disbursed the $2 million cash incentive on July 29, 2019.
On May 27, 2020, City Council was informed that Walmart was on their way to meeting their commitment of employing at least 239 persons by December 31, 2020.
On March 23, 2021, City Council approved the 2020 AVT Exemption for Walmart based on the fulfillment of all the requirements of the Ad Valorem Tax Abatement Economic Incentive Agreement.
On March 22, 2022, City Council approved the 2021 AVT Exemption for Walmart based on the fulfillment of all the requirements of the Ad Valorem Tax Abatement Economic Incentive Agreement.
On March 30, 2023, City Council approved the 2022 AVT Exemption for Walmart based on the fulfillment of all the requirements of the Ad Valorem Tax Abatement Economic Incentive Agreement.
RECOMMENDED MOTION:
Recommendation
Approve the 2023 AVT exemption for Walmart based on the fulfillment of all the requirements of the Ad Valorem Tax Abatement Economic Incentive Agreement by maintaining 239 jobs at an average annual wage above $42,421.