Title
Authorization to Enter into Development Agreement with VisionGate, Inc. (Ordinance S-44358)
Description
Request to authorize the City Manager, or his designee, to negotiate and enter into a development agreement (DA), and to execute any other instruments or documents necessary, with VisionGate, Inc. (VisionGate), or its City-approved designee for its expansion at 10220 S. 51st St. (Site). Further request authorization for the City Controller to disburse funds related to this item.
Report
Summary
On May 21, 2010, the City entered into Purchase and Operating Agreement 128669 with VisionGate for the establishment and operation of a public biomedical research lab and the purchase of two fully patented Generation I Cell-CT research instruments at $600,000 each. As a result of this agreement, VisionGate relocated from the Seattle, Wash. area, bringing with it 20 high-wage jobs, and agreed to remain in Phoenix for the term of the agreement. The term of the agreement ended in May 2015.
VisionGate is a new generation biotech company dedicated to saving lives through early disease detection. VisionGate's first commercial product, LuCED, focuses on the early detection of lung cancer. LuCED is a non-invasive test utilizing sputum (phlegm). Currently, lung cancer is typically detected in its later stages and LuCED has had great success detecting lung cancer at stage 1.
VisionGate is expanding and retaining the economic and social impacts of the company in Phoenix and the region is significant. To facilitate this growth and keep VisionGate based in Phoenix, staff recommends the City enter into a new DA with VisionGate. Subject to City Council approval, the following major business terms have been negotiated with VisionGate and would be implemented through the DA:
- VisionGate agrees to keep its headquarters in and expand its company within the city of Phoenix at the Site.
- VisionGate agrees to create and maintain up to 125 high-wage jobs (average annual salary of at least $75,000), above and beyond VisionGate's pre-October 2015 number of high-wage jobs (Minimum Threshold), within five years of entering into the DA.
- City will provide $2,000 from its Strategic Economic Development Fund (SEDF) to provide a performance based job training fund for each new hired employee above the Minimum Threshold, with a cap limit of 125 employees and certain other conditions to be finalized in the DA. Payment for each new hired employee would be paid in arrears, beginning no sooner than July 1, 2018, for a period not to exceed five years from entering into the DA. At no time will the annual payment exceed $50,000 per year.
- City would work with VisionGate to provide up to $100,000 for incumbent worker training within the guidelines of the Incumbent Worker Training Program, utilizing Workforce Innovation Opportunity Act (WIOA) funds.
- City agrees to work with VisionGate to create an on-the-job (OJT) training program, where the Phoenix Workforce Board may provide up to $100,000 of WIOA funds to offset the expense of providing new employees on-the-job learning and mentorship. The OJT program would reimburse VisionGate for 50 percent of each new hire's hourly salary, up to $4,000 per person.
- Use of Incumbent Worker Training Program and OJT would remain subject to review and approval through those program processes, and nothing in the DA would commit the City to providing these programs to VisionGate.
- The DA will include other terms and conditions as needed.
Financial Impact
Approval of this action will have no impact on the General Fund. Dedicated federal Workforce Innovation Opportunity Act funds will be used in conjunction with funding available in the Strategic Economic Development Fund. The maximum amount of Strategic Economic Development funds to be used is $250,000 beginning no earlier than July 1, 2018.
Concurrence/Previous Council Action
This item was recommended for approval by the Downtown, Aviation, Economy and Innovation Subcommittee at its Feb. 7, 2018 meeting by a vote of 4-0.
Location
10220 S. 51st St.
Council District: 6
Department
Responsible Department
This item is submitted by Deputy City Manager Deanna Jonovich and the Community and Economic Development Department.