STRATEGIC PRIORITY: Economic Development
AGENDA DATE: December 11, 2024
COUNCIL DISTRICT(S): 6
DEPARTMENT: Office of Economic Development
EXECUTIVE: Robin Bentley
______________________________________________________________________
SUBJECT
Title
Authorize a Chapter 380 Economic Development Grant Agreement in an amount not to exceed $500,000.00 with HAECO Global Engine Support, LLC and/or its affiliate in consideration of a new aviation engine repair facility to be located at 11124 Goodnight Lane, Dallas, Texas 75229 including requirements for (a) the relocation and/or creation of 170 full-time jobs to the city of Dallas subject to a minimum 25% local hiring requirement; and (b) required minimum private investment of $17.5 million, in accordance with the City of Dallas Economic Development Incentive Policy - Not to exceed $500,000.00 - Financing: Public/Private Partnership Fund
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BACKGROUND
HAECO Global Engine Support, LLC (“HAECO”) is a North Carolina-headquartered commercial aviation maintenance, repair, and operations company that is currently ranked #1 in the world. The engine support component of the company, presently located in Carrollton, Texas, is taking on an additional work component. New service capability and business from overseas is planned, focused on the engines powering the A320/321 and 737 NG/MAX aircrafts. The new engine support unit will be the primary location in North America for what is known as “engine hospital” repair work, which includes repair work for aircraft on the ground, larger repairs that may involve splitting engines into large components so they can be moved, or repair of internal components inside the engine that are then tested and reinstalled on the aircraft. This additional work component would start in 2025, and HAECO will need to expand operations to accommodate the additional components necessary for the new responsibilities. The current Carrollton facility is not large enough to house the expanded labor force and additional equipment, so the company intends to either relocate to an under-construction 290,000 square foot facility located at 11124 Goodnight Lane in Dallas, Texas 75229 (“Dallas Facility”) or expand its existing headquarters in Greensboro, North Carolina and relocate this portion of the business to that facility.
To support and encourage HAECO’s selection of Dallas as the location for this business expansion and relocation project, the Office of Economic Development recommends an economic development grant of up to $500,000.00. To qualify for the grant, HAECO or a direct affiliate thereof must relocate 76 existing full-time jobs to the Dallas Facility and create an additional 94 jobs at the Dallas Facility, for a total minimum job count of 170 at the Dallas Facility. The minimum average annual salary will be $85,000.00. If HAECO hires a workforce for the newly created jobs that consists of:
• at least 35% Dallas residents, the grant will be $500,000.00;
• at least 25% Dallas residents, the grant will be $350,000.00.
If local hiring is below 25%, then HAECO does not qualify for a grant payment. If HAECO qualifies for a grant payment, the City shall provide the grant payment in one installment payment no later than June 30, 2028. The compliance period shall be five years following the City’s payment of the grant.
HAECO’s required minimum investment associated with the business expansion and relocation in total is $17.5 million, which must take place by December 31, 2028 and includes:
• $2.5 million in tenant improvements at the Dallas Facility; and
• $15 million in new furniture, fixtures, equipment, and machinery in the Dallas Facility.
Grant conditions also include:
• Minimum average wage equivalent to the Massachusetts Institute Technology (MIT) living wage for a single person in Dallas County (currently $22.06) throughout the term of the grant agreement;
• Participation in a workforce partnership program with Dallas College, Dallas Independent School District, University of North Texas-Dallas or Paul Quinn College to start no later than January 1, 2027, and remain in place for a minimum of five years; and
• Annual reporting requirements.
Based on the City’s fiscal impact analysis, assuming a $500,000.00 grant and no indirect benefits, the project produces a net benefit to the City of $247,558.00 over 10 years, and the break-even point of the grant incentive is projected to occur in 2030.
The Dallas Facility is not located in an Economic Development Target Area per the City of Dallas Incentive Policy.
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
The Economic Development Committee was briefed regarding this matter on December 2, 2024.
FISCAL INFORMATION
|
Fund |
FY 2024 |
FY 2025 |
Future Years |
|
Public/Private Partnership Fund |
$0.00 |
$0.00 |
$500,000.00 |
OWNER/GRANTEE
HAECO Global Engine Support LLC
Jim Clarke, Managing Executive Vice President
MAP
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