DEPARTMENT: Economic Development Department
DEPARTMENT HEAD: Rene Dominguez
COUNCIL DISTRICTS IMPACTED: 1
SUBJECT:
Consideration of an ordinance authorizing a Chapter 380 Economic Development Incentive Fund (EDIF) Grant Agreement with Booz Allen for up to a maximum of $250,000. The agreement is based on 1) the creation of 250 jobs (188 with an annual salary of at least $70,000, and 62 with an annual salary of at least $50,000) 2) workforce development to support expansion of the company’s established local internship and scholarship programs 3) and investment of approximately $700,000 in real and personal property improvements. Funding in the amount of $250,000 is available in the EDIF FY 2019 Adopted Budget.
SUMMARY:
Booz Allen Hamilton, Inc. (Booz Allen) is considering expanding its San Antonio operations by creating a cybersecurity and data science talent hub to support its long-term contracts. Staff is requesting City Council consideration of an ordinance authorizing a Chapter 380 Economic Development Incentive Fund (EDIF) Grant Agreement with Booz Allen for up to a maximum of $250,000. The agreement is based on 1) a Performance Grant in the amount of $188,000 for the creation of 250 jobs (188 with an annual salary of at least $70,000, and 62 with an annual salary of at least $50,000) 2) a Workforce Development Grant in the amount of $62,000 to support expansion of the company’s established local internship and scholarship programs 3) and the investment of approximately $700,000 in real and personal property improvements. Funding in the amount of $250,000 is available in the EDIF FY 2019 Adopted Budget.
BACKGROUND INFORMATION:
Booz Allen is a publicly-traded management and information technology consulting firm, headquartered in McLean, Virginia, with 80 offices and 24,000 employees around the world. Booz Allen advises public- and private-sector clients on organization, strategy, logistics, and information technology, among other areas. The company has a long history of working for U.S. civilian and defense agencies. The company recently attained long-term contracts that will be employed by the new cybersecurity and data science talent hub.
Booz Allen intends to expand its presence at its current downtown San Antonio site, the Weston Centre, 112 E Pecan Street (Council District 1). As part of the project, the company will be investing at least $700,000 in the City’s Central Business District.
Booz Allen currently employs 556 people in San Antonio and is looking to increase its workforce by adding 250 new full-time jobs over the course of the next five years. Booz Allen will add a variety of high-skilled, high-tech jobs. Salaries for the new employees will vary by position and experience. Entry level positions will pay at least $50,000 annually and 75% (over 188 jobs) will pay at least $70,000 annually (not including benefits). These new jobs align with the target industry of IT/Cybersecurity and are focused in areas including data analysis, software engineering, and digital solutions. Additionally, the company has shown its commitment to the community by agreeing to expand its local internship and scholarship programs, collaborating with local workforce entities and engaging in City-supported commuter benefits initiatives. San Antonio competed with Virginia and Florida for this project.
The project aligns with several of the key long-term economic goals laid out in the City’s SA Tomorrow Comprehensive Plan, as well as those presented in Forefront SA, the community’s economic development strategic plan led by the San Antonio Economic Development Foundation. Such goals include the creation of high-wage, high-skill jobs, and support for the continued growth of the City’s targeted industries. Additionally, the project presents an opportunity to grow our workforce talent in the city, creating a pipeline for residents without degrees to gain specialized and in-demand training. On May 7, Bexar County Commissioners Court will consider a Chapter 381 Grant of up to $100,000 based on 100 new jobs paying at least $70,000 annually.
ISSUE:
To secure this project, staff recommends a Chapter 380 EDIF grant of up to $250,000, broken up into two parts. First is a discretionary, performance-based grant of up to $188,000 over five years for the creation of 250 new, full-time jobs at the project site (188 of which will be paid at least $70,000 and 62 of which will be paid at least $50,000). Second is $62,000 in restricted workforce development funding to support expanding the company’s established local internship and scholarship programs (such as the National Cyber Patriot Program and the Booz Allen Summer Games Internships) and its collaboration with local workforce entities. Additionally, the City will appoint a single point of contact to assist with permitting and other development needs.
City staff performed a cost/benefit analysis which estimates a net fiscal benefit to the City of $189,000. Further, in collaboration with Dr. Steve Nivin, City staff prepared an economic analysis that estimated a $174 million economic impact to the community over five years including: direct impact from this project, indirect impacts resulting from business-to-business transactions, and induced impacts of increased spending at local businesses.
Chapter 380 of the Local Government Code authorizes the City to provide economic development grants for the purposes of promoting economic development, provided that 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 grant amounts for targeted industry, high-wage jobs.
Booz Allen will comply with EDIF Guidelines, including Living Wage and All-Industry Wage requirements and recapture provisions. The company will also provide each full-time person employed at the project location and his or her dependents with access to a benefits package, including a health insurance program. Additionally, Booz Allen will commit to engage in City-supported commuter benefits initiatives.
ALTERNATIVES:
Based on the City’s competitive offer and local support for this project, Booz Allen has decided to proceed with the expansion of its operations in San Antonio. City Council could choose not to approve the ordinance authorizing the incentive agreement, which may adversely impact Booz Allen’s decision to grow its operations in San Antonio.
FISCAL IMPACT:
This ordinance authorizes a Chapter 380 Economic Development Incentive Fund (EDIF) Grant Agreement with Booz Allen for up to a maximum of $250,000. The grant is based on 1) the creation of 250 jobs (188 with an annual salary of at least $70,000, and 62 with an annual salary of at least $50,000) 2) workforce development to support expansion of the company’s established local internship and scholarship programs 3) and investment of approximately $700,000 in real and personal property improvements. Funding in the amount of $250,000 is available in the EDIF FY 2019 Adopted Budget.
RECOMMENDATION:
Staff recommends Ordinance approval authorizing a Chapter 380 EDIF Grant Agreement of $250,000 with Booz Allen.