Title
Authorization to Amend Ordinance S-49884 Authorizing Development Agreement with Republic Services, Inc. and CN Associates A, LLC and CN Associates K, LLC (Ordinance S-50495)
Description
Request authorization for the City Manager, or his designee, to amend Ordinance S-49884, and to execute any other additional agreements, instruments or documents necessary with Republic Services, Inc., and its affiliates or subsidiaries (Republic) and CN Associates A, LLC and CN Associates K, LLC (Crown), or their City-approved designees, to apply certain funds towards a performance-based job creation reimbursement program for Republic with the eligible portion of certain transaction privilege taxes (TPT). Further request authorization for the City Controller to disburse funds under the terms of the agreement.
Report
Summary
On June 14, 2023, the Phoenix City Council approved Ordinance S-49884, authorizing the City to provide $2,500 from the Strategic Economic Development Fund to Republic, in arrears, for each qualifying new employee at Republic's new Phoenix corporate headquarters, with a cap of $1.5 million in payments. Ordinance S-49884 also authorized the City to reimburse Crown up to $2.4 million (Reimbursement Cap) for public infrastructure improvements derived from the General Fund share of the TPT generated from construction, leasing, and other activity at the site of Republic's new corporate headquarters over 15 years.
Request amending Section 3 of Ordinance S-49884 to add the following terms:
- If Crown should not utilize or qualify for the full Reimbursement Cap for public infrastructure, Republic will be eligible for additional job creation payments to be paid from the eligible share of the TPT generated at the site.
- Additional job creation payments will only be made for each new employee with an average annual wage at or above $97,000 (including base pay, overtime, commissions and bonuses) in their second year of employment.
- The total combined reimbursement to Crown and Republic shall not exceed the TPT Reimbursement Cap.
All other terms and conditions of the Ordinance will remain unchanged.
Contract Term
The term of the agreement will not exceed 15 years from the Construction Commencement Date or extend beyond the date the Reimbursement Cap is reached, whichever occurs sooner.
Financial Impact
This action will not change the total financial impact as approved by Ordinance S-49884. The action modifies how the reimbursement of the eligible General Fund share of the TPT generated from the site over 15 years, with a maximum of $2.4 million in payments, can be remitted. Financial terms of the agreement will be provided to the Budget and Research and Finance departments for review prior to execution of the agreements.
Concurrence/Previous Council Action
Previously approved by the City Council on June 14, 2023 (Ordinance S-49884).
Location
Desert Ridge, Phoenix, Ariz.
Council District: 2
Department
Responsible Department
This item is submitted by Deputy City Manager John Chan and the Community and Economic Development Department.