Title
Authorization to Enter into Development Agreement with Mercury Systems (Ordinance S-46155)
Description
Request authorization for the City Manager, or his designee, to enter into a Development Agreement (Agreement), and to execute any other instruments or documents necessary with Mercury Systems. Further request the City Controller to disburse funds in an amount not to exceed $100,000 with this action. Funding is available in the Strategic Economic Development Fund.
Report
Summary
After a search involving multiple states and regions, Mercury Systems expressed its desire to expand its presence in Phoenix. Mercury Systems, an international company with 1,200 employees worldwide, was founded in 1981 and is a publicly-traded provider of critical defense and intelligence programs with an emphasis on defense electronics. Mercury Systems currently occupies a manufacturing facility at 3601 E. University Drive #7217, and will expand into an adjacent 50,000 square foot building by 2022.
Mercury Systems has approximately 290 local employees. This expansion will result in up to 100 new high-wage advanced manufacturing jobs to be phased by 2023. As part of the expansion Mercury Systems will be investing nearly $31 million in construction, machinery and equipment, furniture and fixtures and IT.
The City recognizes the significant economic impacts to the City and region from Mercury System’s expansion efforts. Advanced manufacturing has a multiplier effect that ripples across the economy creating jobs and growth in other industries. To remain competitive on an international level and ensure quality manufacturing positions are created in Phoenix, the terms of the Agreeement are as follows:
- Mercury Systems agrees to expand its organization within the City of Phoenix into an exiting facility near 3601 E. University Drive.
- Mercury Systems intends to create up to 100 additional new jobs within four years of entering into the agreement.
- The Agreement will detail a performance-based training fund.
- The City will provide $1,000 to Mercury Systems for each net new employee earning an annual wage exceeding $50,000 in their second year of employment, and certification of other requirements to be specified in the Agreement.
- All other terms and conditions deemed necessary by the City.
Entering into the Agreement and participation in this job creation fund does not preclude Mercury Systems from working with the City’s Workforce Innovation Opportunity Act Program or any other local and/or State program.
Financial Impact
The total contract amount will not exceed $100,000 over a four-year period. Funding is available in the Strategic Economic Development Fund beginning in FY 2020-21.
Location
3601 E. University Drive and expand to an adjacent facility
Council District: 8
Department
Responsible Department
This item is submitted by Assistant City Manager Deanna Jonovich and the Community and Economic Development Department.