DEPARTMENT: Economic Development Department
DEPARTMENT HEAD: Rene Dominguez
COUNCIL DISTRICTS IMPACTED: Council District 1
SUBJECT:
A Chapter 380 Economic Development Grant Agreement with Legal Holdings, LLC (d/b/a Easyexpunctions.com) in an amount not to exceed $100,000 over three years.
SUMMARY:
Staff is requesting City Council consideration and action on an Ordinance authorizing the City to enter into a Chapter 380 Economic Development Grant Agreement (Agreement) with Easyexpunctions.com. The Agreement will provide job creation-based financial incentives to Easyexpunctions.com in an amount not to exceed $100,000 over 3 years, based on Easyexpunctions.com’s commitment to relocate its headquarters from Austin to Downtown San Antonio, relocate 8 full-time jobs, and create at least 42 new full-time IT sector related jobs.
BACKGROUND INFORMATION:
As part of the City’s planning and preparation for San Antonio’s future growth and needs, the SA Tomorrow Comprehensive Plan lays out specific, long-term goals that seek address key economic challenges, including, the need to nurture and support entrepreneurial development, start-ups, innovation, and expand job creation in the City’s Targeted Industries. Complementing SA Tomorrow and led by the San Antonio Economic Development Foundation, Forefront SA outlines community goals and tactics to support greater economic growth through a number of shared strategies. These strategies emphasize the importance of continued growth in the community’s Targeted Industries, and the need to strengthen local industry ecosystems.
San Antonio itself has seen marked growth and improvement in its IT ecosystem over the past few years, with particular momentum occurring in the City’s downtown area. The focus on growth in the City’s Targeted Industries and increase in available lifestyle amenities have also helped the City recruit like-minded entrepreneurs and start-up companies interested in making San Antonio their headquarters. In particular, the growth of the IT ecosystem and expansion of the City’s IT & Cybersecurity Industry positively impact and expand the economic development benefits of this growth.
The Easyexpunctions.com project presents a unique opportunity for the City to demonstrate its commitment to supporting the recruitment and growth of an IT company, the continued development of downtown through the relocation of a corporate headquarters.
Founded in 2015, Easyexpunctions.com has 8 full-time employees at its current location in Austin, TX, and provides expunction and non-disclosure document support and services for residents in Texas, Ohio, Illinois, and Maryland. The company has seen marked growth in its revenues and sales transactions over the past year, and is working to expand into 25 additional states by 2017. The company’s founder and CEO, Yousef Kassim, is a graduate of Trinity University and St. Mary’s Law School.
As part of its packages of products and services, Easyexpunctions.com’s allows individuals to easily determine their expunction or non-disclosure eligibility and helps prepare the necessary documents for eligible individuals to submit themselves to the appropriate legal entity. Once a record has been successfully expunged or sealed under a non-disclosure agreement, the company’s innovative technology and proprietary, web-based algorithms search, prioritize, and categorize information contained in millions of records across numerous criminal record databases and help remove the non-conviction or eligible non-disclosure from hundreds of databases and internet sites. The company offers a free comprehensive background check for anyone who registers, and the company’s expunction cost is around a quarter of that for a traditional lawyer, with the average transaction value for a customer at around $250.
In addition to their job creation commitment, Easyexpunctions.com will also commit to work with the City and its community partners in order to develop and incorporate potential strategies and services into the community’s larger workforce development plans, with the goal of assisting qualified individuals looking to improve their chances of successful employment as they re-enter or advance through the local workforce.
In order to secure this project at a Downtown San Antonio site located at 600 Navarro Street (District 1), staff recommends a job relocation, creation, and retention based grant agreement in an amount not to exceed $100,000 over 3 years. In turn, Easyexpunctions.com must relocate its headquarters from Austin to San Antonio, and the grant will be paid out as the company reaches certain job-creation milestones, including the relocation of 8 full-time jobs and creation of up to 42 new, full-time IT-related professional and support jobs over 3 years, with an average annual salary of $45,000. Easyexpunction.com’s failure to reach job creation milestones will limit the amount of grant funding which the company may access, and all positions relocated and created must be maintained in San Antonio for at least three years following the end of the grant term.
In accordance with the City’s Economic Development Incentive Fund (EDIF) Guidelines, 100% of the jobs at the project site will meet the minimum hourly “living wage” of at least $11.68 per hour and, within one year, at least 70% of all employees at the project site will meet or exceed the median “All Industry Wage” of $14.96 per hour.
In collaboration with the City’s economist, Dr. Steve Nivin, staff prepared an economic analysis that estimated the direct impact from the Easyexpunctions.com project, the indirect impacts resulting from business-to-business transactions, and the induced impacts of increased spending at local businesses, with over $65M in overall economic impact to the community. The analysis also included an estimated fiscal impact of $702,427 to the City over the first 5 years of the project.
ISSUE:
Chapter 380 of the Local Government Code authorizes the City to provide economic development grants for the purposes of promoting economic development provided the City has established a program for such purposes. City Council approved a program promoting economic development in April 2005.
The recommended incentive complies with EDIF Guidelines for per job grants for headquarter relocations, projects located within the Inner City Reinvestment Infill Policy (ICRIP) Area, and other related criteria.
ALTERNATIVES:
Based on the City’s offer and local support for the project, Easyexpunctions.com has decided to proceed with relocating its headquarters to Downtown San Antonio and relocating 8 full-time jobs and creating at least 42 new full-time jobs based on the competitive financial incentives offered by City staff to secure the project. City Council could choose not to approve the Ordinance authorizing the City to enter into the Agreement, which could adversely impact Easyexpunctions.com’s decision to select San Antonio for the relocation and growth of its headquarters.
FISCAL IMPACT:
Staff recommends a 3-year job relocation, creation, and retention-based grant agreement with Easyexpunctions.com for a total dollar amount not to exceed $100,000. Funding is available in the Economic Development Incentive Fund’s FY 2016 budget for this economic development grant. The grant agreement will be paid based on the company’s relocation and job creation milestones.
RECOMMENDATION:
Staff recommends approval of the Ordinance authorizing the City to enter into a Chapter 380 Economic Development Grant Agreement with Easyexpunctions.com. The City will provide a performance-based grant in an amount up to $100,000, provided that Easyexpunctions.com relocates its headquarters, 8 full-time jobs, and creates at least 42 new full-time jobs in Downtown San Antonio.