Recommendation to receive supporting documentation into the record, conclude the public hearing regarding an economic subsidy in connection with a Community Service Agreement under the Capital Investment Incentive Program (CIIP) and with Weber Metals, Inc., pursuant to California Government Code Section 53083; Adopt resolution to establish a City Capital Investment Incentive Program (Citywide); and Approve and authorize the execution of a Community Services Agreement between the City and Weber Metals, Inc. (Weber), to provide for the terms and conditions for payment. (District 9)
Recommendation to receive supporting documentation and to record conclude the public hearing regarding an economic subsidy in connection with a community service agreement under the Capital Investment Incentive Program and the Weber Metals, pursuant to California Government Code Section 53083 adopt resolution to establish a City Capital Investment Incentive Program citywide pursuant to California Government Code 51298 and approve and authorize the execution of a community service agreement between the City and Weber Metals to provide the terms and conditions for repayment. District nine. This is a report from the City Manager and requires. Those that want that they plan on testifying in this hearing. Please stand up and please raise your right hand. And Madam Clerk. You and each of you do solemnly state that the testimony you may give in the cause now and pending before this body shall be the truth, the whole truth, and nothing but the truth, so help you God. Thank you. Mr. West. Thank you, Mr. Mayor. Members of the Council, the staff report will be given by our. Economic and Property Development Director Mike Conway. Mayor Garcia, members of the City Council. Weber Metals, located at 6976 Cherry Avenue in Long Beach, had previously announced a significant expansion and includes the acquisition and installation of a 60,000 ton press forge which when installed, will be the largest press forge in the United States. Expansion costs have been estimated at $295 million, with potential growth and job generation up to 86 new jobs by 2020 at full operation of the Forge recently, Weber Metals parent company Otto Fuchs Aerospace Group is reconsidering the location of the press forge outside of California. This would not only eliminate the significant investment in the Long Beach, but eliminate the potential job generation as well. And unfortunately, without the significant capital reinvestment, Weber Metals may begin to lose market share and future growth, resulting in job losses. Representatives from the city. The county in the state met on a number of occasions to identify incentives to support Webber Metals in their effort to convince its parent company to keep its investment in Long Beach. The most significant incentive identified that evidence is the city's and state support of heavy metals was the state's capital investment incentive program . Under this program, cities and counties may share a portion of the property taxes assessed on real property in excess of a baseline assessment. This is very similar to the city sales tax incentive program, which shares sales tax revenues above an established baseline. The underlying concept is both the city and the company share in the increased revenues that are derived from the capital investment, without which there would be no benefits to share. The program requires an investment of more than $150 million before a property tax sharing can occur. The ad valorem value of this $150 million investment added to the existing property tax base establishes the new baseline assessment. The ad valorem value of capital investment above the new baseline assessment is available for property tax sharing. The program also requires that the involved parties enter a community services agreement, which has a term of 15 years, and this agreement provides the mechanism for the property tax sharing above the baseline assessment for a 15 year period under the proposed agreement. If Weber Metals invest $295 million over the 15 year term of the agreement, the city would receive the ad valorem property taxes related to the existing base and the ad valorem value of the first $150 million in capital investment. Above that amount, the city would share 75% of the incremental ad valorem property tax and retain 25% of the incremental ad valorem property tax. And based upon this investment, the city would receive 2 million $2,815,000 over 15 years. This includes 2.5 million from the established baseline and approximately 265,000 above the established baseline. Without this investment by Weber Metals, the city would receive the existing baseline, which is approximately $530,000 over the next 15 years. However, metals would receive approximately 790,000 over 15 years as an economic development incentive. The program provides an opportunity to support a business seeking to expand in Long Beach with an extensive capital investment program and works to preserve and grow the job base in our city with an important industrial sector. On August 18th, 2015, the County Board of Supervisors approved a similar agreement for the County of Los Angeles to participate in the same program. So staff recommends that City Council conclude the hearing, adopt the resolution and approve the execution of a community services agreement with Weber Metals. And I see Weber Metals has some representatives in the audience here this evening as well, and I'm available to answer your questions. Thank you. Thank you. Very thorough presentation, Mr. Conaway. There is a motion and a second. Anyone want to comment on the hearing? Seeing an account from a Richardson. Thank you, Mr. Mayor. This represents an investment in our underutilized industrial space and investment in manufacturing and jobs here in Long Beach. I had the opportunity to tour this facility with my staff on two separate occasions, and it's quite an impressive operation. This 60,000 ton manufacturing hydraulic forged press, it will be the largest in in the United States and be a project of international significance. So I stand in complete support for this. Weber has also been a tremendous community ally, particularly not only to our community, but also our adjacent community of Paramount, in that they've been involved in their education, foundation and support for our North Long Beach students as well. So this is a no brainer for me. It's it's a really creative way to bring an economic impact, make an economic impact on the North Long Beach community. So I urge the city council to support this. Councilman Mongo. I echo the comments of my colleague. I think that this is a great economic driver for our city and we're very fortunate to have them as a partner. So thank you very much for continuing to grow your business here in Long Beach. Thank you. Councilwoman Price. Same. My chief of staff took a tour of the facility and gave me a very detailed report. She was incredibly impressed with the operations. I think that the the jobs that will be created are exactly what our city needs. Professional jobs in engineering, mechanical fabrication and support roles, accounting, finance, human relations, clerical, etc.. We're very supportive of this, and I think it's an innovative way to bring in some additional revenue. So thank you. Thank you. Councilmember? Yes. I too, took a tour of the facility a few months ago. I think your chief of staff was actually with me. Councilmember Price. And it took me back some time because I saw the presses, I saw the fabrication work going on, and I saw processes that I myself did as an aerospace worker. And reminds me of the importance of this this particular motion and reminds me of the importance of keeping good jobs here in Long Beach and an opportunity actually to gain good manufacturing jobs here. And so I'm here for support. Thank you. And Councilman Andrew. Yes. Yes, thank you, Mayor. I also like the echo sentiments of my colleagues up here about this situation, because the fact that you guys always note in my famous model is that a job can stop a bullet. And when you talk about 80 or 90 some jobs being created in the city of Long Beach, I think that's a fantastic, you know, deal. So I will have a chance to go visit the complex and see what it's really all about. Thank you guys again for coming and sharing your business here in the city of Long Beach. Thank you. And with that, we're going to take a vote. There's a motion on the floor. Motion pass motion. Carries. Thank you and thank you all. Webber Medals. Congratulations. And thank you again for being such a great business partner. Hearing number three.