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HomeMy WebLinkAbout~Master - IEDA Contract for financial assistance for XPANXION, Inc. RESOLUTION NO. 16-295 RESOLUTION APPROVING IOWA ECONOMIC DEVELOPMENT AUTHORITY CONTRACT FOR FINANCIAL ASSISTANCE FOR XPANXION, LLC, WITH LOCAL MATCH FOR THE CITY OF AMES WHEREAS,Xpanxion,LLC,is a software services company with operating offices in five states and Pune, India; and, WHEREAS,the company is a wholly-owned subsidiary of California-based UST Global;the Ames Xpanxion office, which opened in 2011 and has grown from 14 to 41 employees, provides software development and testing operations; and, WHEREAS,the company has applied for economic development assistance for a project that includes consolidating offices from four suites across two buildings to a single location that will accommodate both the current workforce and the addition of 45 new full-time positions; and, WHEREAS, thirty-six of the 45 new jobs exceed the High Quality Job Program threshold of$42,307 and all will exceed within 36 months of the incentive award; and, WHEREAS, the Iowa Economic Development Authority (IEDA) has agreed to provide incentives to the company, including a $90,000 forgivable loan; Xpanxion is also eligible for $299,000 in job training from the State of Iowa; and, WHEREAS, a condition of the state assistance is a local match in the form of an $18,000 forgivable loan; funding for the local match will be half from the City of Ames and half from the Ames Economic Development Commission (AEDC); and, WHEREAS, at the July 28, 2015, meeting, the City Council endorsed an Xpanxion application for economic development assistance to the IEDA that included a $90,000 no interest loan and$90,000 forgivable loan; and, WHEREAS,the local match included in the application was an$18,000 no interest loan and a $18,000 forgivable loan, and the company has decided to go forward with only the forgivable portion of the assistance; and, WHEREAS,the company has also requested different terms than the usual forgivable loan terms (in other cases, the City and IEDA provide the funding up front when certain conditions are met); and, WHEREAS,in the case of Xpanxion,the funding and loan forgiveness will occur at the end of the term of the agreement, and this is based on the application for assistance which identified a "Location Disadvantage" (Incentive), rather than the more typical "Financing Gap." NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Ames, Iowa, that the contract for economic development assistance amongst the City of Ames, the Iowa Economic Development Authority, and Xpanxion, LLC, with a local match contract providing an $18,000.00 forgivable loan is hereby approved. ADOPTED THIS 24th day of May, 2016. • 144A.-O A tom• 67A � Diane R. Voss, City Clerk Ann H. Campbell, Mayor Introduced by: Nelson Seconded by: Corrieri Voting aye: Beatty-Hansen, Corrieri, Gartin,Nelson, Orazem Voting nay: None Absent: Betcher Resolution declared adopted and signed by the Mayor this 24'day of May, 2016.