Park West CC(4)-AG 930713Consideration and approval of calling a Public Hearing on July 27, 1993 to designate a
reinvestment zone for a tax abatement submitted by MJ Designs/Dupey Management.
SUBMi-i-[£D BY:
Signature)
EVALUATION OF ITEM:
STAFF REP.: Alan Johnson, Acting Finance
Director
OTHER REP.:
DATE:
BUDGET AMT.
AMT +/- BUDGET
LEGAL REVIEW BY:
REVIEWED BY
CITY OF COPPELL, TEXAS
APPLICATION FOR TAX ABATEMENT
Information may be submitted on this form using extra pages where necessary or may be
submitted as a separate application document dealing with the matters listed herein.
APPLICANT:
1~1 De_~iRns/Dupey
Name
9015 ~:teflin~ Street, Irvln;. Tex~s 75068
Address
(214) 929-8595
Telephone Number
APPLICANT'S REPRESENTATIVE;
Michael E. Nuzum
Name
I~ID Inve.qr. ments~ ]nc.
9015 $cerlln; Street. Irving, Tex~ 75068
Address
(214) 929-8595
Telephone Number
Applicant requests consideration for ~ax abatement and In regard thereto submits the
following:.
2.
3.
4.
Transmittal letter to City Manager
Completed Application
.Preliminary Plans
Rendering of Prolecc
The property (relnvestment zone) is located within;
City of Coppell X
Coppell lSD X
Dallas County X
Denton County
The following is a description of the prope~zy to be included in the relnvestmenr zone
which is also sho~v~l on the a~r,tched plat'
Because a final site has not been selected, :he Coppell site options include:
lO0 acres in Gateway Business Park valued at $5,~.00,000
(Legal Descrtndon).b.~' ....... v ........
2. I00 acres In Parkwest Commerce Center '""~ "~,~L'~l aC $5,~00~000 :,~i. -
(Legal Description)
June 7, 1993
Mr. Frank Trando
city Manager
city of Coppell
P.O. Box 478
Coppell, Texas
75019
Dear Mr. Trando:
MJ Designs is considering locating its new headquarters in
Coppell. We strongly believe that, in order for MJ Designs to be
competitive in its industry and to generate job growth, we need to
for~ a cooperative team with officials of the city where we locate
our new headquarters.
We would like to form such a team with the City of Coppell.
Accordingly, we request the city of Coppell and Coppell I.S.D.
provide certain incentives to MJ Designs for its headquarter
relocation. Per the Coppell city council's request, please find an
enclosed application for a tax abatement.
In addition to MJ Designs' request for a 50% abatement of
taxes for five years on building, land, inventory and FF&E, we also
request the following:
1. An exemption from inventory taxes for interstate in
transit inventory held less than one hundred seventy-five
days (Freeport exemption).
2. A waiver of all building inspection fees, tap fees,
permit fees, etc., and a ten business day turnaround on
building plans submitted for review and approval.
3. The support of the City if the company seeks to
establish a foreign trade zone on the property.
4. A written response to this request as soon as possible
with city Council and School Board action within 30 days.
MJ Designs' $39,000,000 project and its potential growth,
which are discussed further in the application, could substantially
enhance the-city's profile in the Dallas Fort-Worth business
community as well as its tax base. Thank you.
Sincerel~
Michael E. Nuzum
CITY OF COPPELL, TEXAS
APPLICATION FOR TAX ABATEMENT
The following is a statement supporting the likelihood that
the project will provide retention or expansion of primary
employment and will attract major investment within the zone that
will be a benefit to the property and contribute to the economic
development of the city.
MJ Design's proposed facilities are planned to support the
warehouse and corporate functions of DUpey Management Corporation
and MJD Investments Inc., their 27 existing stores, and 289
warehouse and corporate employees (MJ Designs employs approximately
2000 total employees).
The majority shareholder of MJ Designs, Michael Dupey, resides
in Coppell, as do many other company employees.
MJ Designs' plans to expand its operations by at least 50
stores in the next 5 years will necessitate a substantial increase
in the employment of warehouse and corporate office personnel.
Additionally, MJ Designs' selection of Coppell for its company
headquarters could result in the relocation of company vendors and
company personnel in the city. Furthermore, Coppell could benefit
from an increase in company employee's patronage of city
restaurants and shops.
MJ Designs' project will consist of a 100 acre site with
approximately 350,000 to 400,000 square feet of warehouse and light
manufacturing space as well as 40,000 to 50,000 square feet of
office space. The office space will include the company's
executive offices, accounting functions, data processing,
video/commercial production studio and advertising/design studios.
MJ Designs' initial investment represents a significant tax
base for the city. The pre-construction and post-construction
valuation is as follows (not inclusive of any expansions of the
initial building or additional buildings):
1993 1994
Land
Building
Inventory
FF&E
$5,600,000
$5,600,000
$8,000,-000
$23,400,000
$39,000,000
At the current tax rate and property values, the City and
school District can expect to receive tax revenues from MJDesigns
of approximately $244,000 per year for the first five years and
$487,500 per year after 5 years.
Provide a written narrative detailing how the project will meet all
or at least two of the following criteria.
A. Project involves a minimum increase in property value of 300
percent for new project; 50 percent for expansion, or an investment
of at least one million in taxable assets.
~993 Valuatio__n
Projected 1994-Valuation
Land $5,600,000
Land $5,600,000
Building $8,000,000
Inventory $23,400,000
FF&E $2.000.000
Total
$39,000,000
The property value associated with
will increase 596% from approximately
(for all property and improvements).
the existing tract of land
$5,100,000 to $39,000,000
B. Project makes a substantial contribution to redevelop efforts
or special area plans by enhancing either functional or visual
characteristics, i.e., parking, circulation, facades, materials,
signs, historic structures, etc.
The facility will be operationally state of the art with
extensive landscaping, improved open areas, screened truck and rail
components, and paved parking areas. The MJ Designs project will
enhance the west side of Coppell and add immediate value to
surrounding sites.
C. Project has high visibility, image impact, or is of a
significantly higher level of development quality.
Since MJ Designs is in a consumer-oriented business, the
company is very conscious of its public image in Dallas Fort-Worth.
MJ Designs will design and construct its planned facility in a
manner that is consistent with its reputation for corporate quality
and retailing excellence in the Dallas Fort-Worth community.
D. Project is in an area which might not otherwise be developed
because of constraints of topography, ownership patterns, site
configuration, etc.
The primary constraint facing the city with enhancing tax
revenues from this site is one of supply and demand. While there
is a 20-30 year supply of industrial sites in the Dallas Fort-Worth
Metroplex, the demand for projects of this scale by operating
companies like MJ Designs' is projected to be low for many years.
The proposed Project transfers ownership of the property from
an investor to an operating business. MJ Designs, as an operating
business and a proposed partner of the city of Coppell, could
provide a growing employment base and significant tax revenue for
the city.
E. Project can serve as a prototype and catalyst for other
development of a higher standard.
In addition to this project attracting similar companies and
suppliers, this project will set a high standard for quality
design, construction, and development. In the proposed
partnership, the company will look to the city to maintain this
high standard for quality and the company's significant investment.
F. Project stimulates
commercial activity.
concentration of employment and/or
The company's relocation will stimulate commercial activities
thru 'initial construction activity, the attraction of vendors and
company employees, improved property values for surrounding sites,
and increased patronage of City restaurants and shops by company
employees.
G. Project generates greater employment than would otherwise be
achieved, i.e., commercial/industrial versus residential or
manufacturing versus warehouse.
In addition to its warehouse and executive offices, the
project will consist of limited light manufacturing and assembly of
products, studios for video/commercial production and copy
advertising. These areas are important not only because they are
more employment intensive and generate higher wages than
distribution, but also because these activities will attract
related service providers.
H~ Describe the structures to be constructed'within the zone and
give the estimated value of structures to be included in the
project.
The initial construction will consist of 350,000 to 400,000
square feet of warehouse/light manufacturing space, approximately
30' clear, 40,000 to 50,000 square feet of office space, one or two
stories attached to the warehouse. The building will be designed
to expand in 100,000 square feet increments three or four times.
The remaining site will be used for future expansions or buildings.
The estimated value of the structure is:
Initial Building
Expansion 1
Expansion 2
Expansion 3
Expansion 4
Total Structure Value
Total Land Value
Total Real Estate
Total Inventory
$8,000,000
$1,600,000
$1,600,000
$1,600,000
$1,600,000
$14,400,000
$20,000,000
$23,000,000
$ 6,500,000
$ 6,500,000
$ 6,500,000
$49,000,000
Total Project $69,000,000
Other uestions
- Median Salary of employees?
$65,000 per year (salaried); $8.64 per hour (hourly)
Estimated number of employees who will actually be living
Coppell?
Approximately 25 in 1993; Approximately 100 in 1998
in
- Type of transportation which will be utilized-trucks, rail,
air, etc., and the estimated number of vehicles which will be used?
Primarily truck, possibly limited rail; 15 vehicles initially
- Hours of operation?
Normal business hours, except at peak seasons when warehouse hours
are expanded to 5:00 A.M. to 1:00 AM.
- Estimated water usage?
140,000 gallons per month
- Type of products-are any hazardous material involved?
The company carries in its product lines, for retail and wholesale
sale, items such as paint, glue, and fixatives that may be
considered hazardous and which to the company's knowledge are
handled in compliance with applicable laws and regulations
- Will there be storage tanks or gas pumps?
None planned at this time.
- Will buildings be single-level or multi-story?
Two story office/one story warehouse
- will there be a security fence?
Not initially, but dependent upon security requirements,
may be installed at a later date.
a fence