DEPARTMENT: Economic Development
DEPARTMENT HEAD: Rene Dominguez
COUNCIL DISTRICTS IMPACTED: 1
SUBJECT:
City Council consideration of the Nomination of Whataburger Restaurants LLC as a Texas Enterprise Project.
SUMMARY:
Staff is requesting City Council action on a Resolution nominating Whataburger Restaurants LLC (“Whataburger”) for designation as a Texas Enterprise Project. The Texas Enterprise Zone Project (TEZ) is designed for local communities to partner with the State of Texas to promote job creation and significant private investment in economically distressed areas of the state. The TEZ designation will allow Whataburger a potential refund of state sales and use taxes on qualified expenditures of up to $1.25 million over 5 years based on its capital investment and meeting any state workforce requirements.
BACKGROUND INFORMATION:
Whataburger, founded in 1950 and headquartered in San Antonio, Texas since 2009, is part of a group of family-owned companies that operate over 790 restaurants supporting 37,000 employees across the country, with locations in 267 communities in Texas alone. With annual revenue of over $1 Billion, Whataburger provides services to over 340 communities in 10 states. Whataburger currently employs over 660 people at its San Antonio headquarters campus at 300 Concord Plaza, San Antonio, Texas 78216 (Council District 1). Whataburger's headquarters campus serves as the operational hub for the company and houses various service support departments such as accounting and finance, scheduling, human resources, and customer service.
In order for the headquarters expansion to qualify for designation as a Texas Enterprise Project, the company must: (-1-) make a capital investment of at least $5,000,000; (-2-) commit that they will meet any state workforce requirements of hiring economically disadvantaged persons, Veterans, or enterprise zone residents to receive a state sales and use tax benefit; and (-3-) receive a nomination by the City to be designated by the State of Texas as a Texas Enterprise Project.
In connection with its headquarters expansion, Whataburger is committing to the creation of at least twenty (20) new full-time jobs and the retention of 664 jobs at its headquarters site over the course of the Enterprise Project 5-year designation period and will meet any state workforce requirements of hiring economically disadvantaged persons, Veterans, or enterprise zone residents to receive a state sales and use tax benefit. Through the City’s nomination as a Texas Enterprise Project, Whataburger’s expansion of its corporate headquarters will have an enduring positive influence on San Antonio's workforce.
ISSUE:
The Texas Enterprise Zone Program (TEZ) is an economic development tool for local communities to partner with the State of Texas to promote job creation and significant private investment that will assist economically distressed areas of the state.
The City of San Antonio receives an allotment of 9 potential Enterprise Project designations every state biennium. Biennium 2016-2017 commenced on September 1, 2015. If this Enterprise Project designation is approved, the City will have 8 of its Enterprise Project designations remaining for the remainder of this state biennium, ending on August 31, 2017.
ALTERNATIVES:
Based on the City’s offer to nominate Whataburger as a Texas Enterprise Project, Whataburger will expand its corporate headquarters campus in San Antonio. City Council could choose not to approve the nomination, which could impact Whataburger’s decision to expand its corporate headquarters and make its investment and hiring commitments.
FISCAL IMPACT:
There is no fiscal impact to the City of San Antonio.
RECOMMENDATION:
Staff recommends approval of a Resolution nominating Whataburger as a Texas Enterprise Project.