Progress Rail Services Corporation
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Board Summary Progress Rail Services Corporation Date: November 16, 2017 1600 Progress Drive, Albertville, AL 85950 Main Location: Carson City Joshua Johnson, Director of Operational Excellence Manufacturing Business Type: New County: Clark County Development Authority Representative: Michael Walsh, LVGEA APPLICATION HIGHLIGHTS - Progress Rail Services Corporation has leased a 130,000 square foot manufacturing facility in Henderson, NV. The company expects the facility to be operational in the fall of 2017. - While some employees will relocate from the company's other facilities, it is anticipated the majority of the Henderson facility staff will be local hires. - The company is the world's largest builder of diesel-electric locomotives for all commercial railroad applications. PROFILE Progress Rail Services Corporation, a wholly owned subsidiary of Caterpillar since 2006, is a supplier of railroad and transit system products and services headquartered in Albertville, Alabama. The company offers advanced Electro-Motive Diesel (EMD) locomotives and engines, railcars, trackwork, fasteners, signaling, rail welding and Kershaw Maintenance-of-Way equipment, along with dedicated locomotive and freight car repair. The company also offers advanced rail technologies, including data acquisition and asset protection equipment. The company's Henderson facility will remanufacture traction motors for the rail industry. Progress Rail Services Corporation operates a network of nearly 200 locations across the United States, Canada, Mexico, Brazil, Germany, Italy, Australia, China, Germany, India, South Africa, the United Arab Emirates, and the United Kingdom. Source: Progress Rail Services Corporation SIGNIFICANCE OF ABATEMENTS IN THE COMPANY'S DECISION TO RELOCATE/EXPAND Progress Rail Services Corporation selected Henderson out of numerous potential cities. The company reviewed each city's economic climate, proximity to its main customers, utility rates, labor and property costs, highway accessibility, and incentives packages as points of comparison. The company notes Nevada's reputation for offering incentives to businesses that create jobs and stimulate economic growth. The company is interested in exploring the incentives offered as part of its effort to invest in the facility and to ensure job growth, stability, and fair wages for its employees. Source: Progress Rail Services Corporation SIGNIFICANCE OF ABATEMENTS IN Statutory Application Sufficient % Over / Under Job Creation 50 50 Yes 0% Average Wage $21.95 $21.97 Yes 0% Equipment Capex (SU & MBT) $1,000,000 $1,475,300 Yes 48% Equipment Capex (PP) $5,000,000 $1,475,300 No -70% INCENTIVES Requested Terms Estimated $ Amount Sales Tax Abmt. 2% for 2 years $92,206 Modified Business Tax Abmt. 50% for 4 years $84,315 Total $176,521 JOB CREATION Contracted 24-Month Projection 5-Year Projection 50 50 110 OTHER CAPITAL INVESTMENT Land Building Purchase BTS / Building Improvements $0 $0 $1,500,000 ECONOMIC IMPACT ESTIMATES (10-Year Cumulative) Total Construction Total Jobs Supported 160 15 Total Payroll Supported $64,867,690 $686,481 Total Output Estimate $200,531,460 $2,365,947 Estimate includes jobs, payroll & output by the company assisted as well as the secondary impacts to other local businesses. NEW TAX REVENUE ESTIMATES (10-Year Cumulative) Direct Indirect Total Local Taxes Property $902,181 $2,295,386 $3,197,567 Sales $60,938 $1,180,566 $1,241,504 Lodging $0 $48,831 $48,831 State Taxes Property $49,344 $133,652 $182,996 Sales $49,006 $402,180 $451,186 Modified Business $515,029 $244,713 $759,742 Lodging $0 $16,480 $16,480 Total $1,576,498 $4,321,808 $5,898,306 EMPLOYEE BENEFITS - Percentage of health insurance covered by company: 91%. - Health care package cost per employee - $6,046 annually with options for dependents. - Overtime, PTO/Sick/Vacation, Merit Increases, Tuition Assistance/ Retirement Plan / Profit Sharing / 401(k), Bonus. NOTES - Percentage of revenue generated by the new jobs contained in this application from outside Nevada: 100%. - The company is also considering Reno, NV; Carson City, NV; Salt Lake City, UT; Flagstaff, AZ; Cedar City, UT; and Farmington, NM, as potential locations. R ! 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Company is an / a: (check one) Incentive Application New location in Nevada Company Name: Progress Rail Services Corporation Expansion of a Nevada company Date of Application: August 16, 2017 Section 1 - Type of Incentives Please check all that the company is applying for on this application: SalesS & Use Tax Abatement Sales & Use Tax Deferral ModifiedM Business Tax Abatement Recycling Real Property Tax Abatement PersonalP Property Tax Abatement Other: Utility Tax Abatement Section 2 - Corporate Information COMPANY NAME (Legal name under which business will be transacted in Nevada) FEDERAL TAX ID # Progress Rail Services Corporation 59-2740308 CORPORATE ADDRESS CITY / TOWN STATE / PROVINCE ZIP 1600 Progress Drive Albertville Alabama 35950 MAILING ADDRESS TO RECEIVE DOCUMENTS (If different from above) CITY / TOWN STATE / PROVINCE ZIP TELEPHONE NUMBER WEBSITE 800 476 8769 www.progressrail.com COMPANY CONTACT NAME COMPANY CONTACT TITLE Joshua Johnson Director of Operational Excellence E-MAIL ADDRESS PREFERRED PHONE NUMBER [email protected] 708 205-9521 Has your company ever applied and been approved for incentives available by the Governor's Office of Economic Development? YesY No If Yes, list the program awarded, date of approval, and status of the accounts (attach separate sheet if necessary): Section 3 - Program Requirements Please check two of the boxes below; the company must meet at least two of the three program requirements: A capital investment of $1,000,000 in eligible equipment in urban areas or $250,000 in eligible equipment in rural areas are required. This criteria is businesses. In cases of expanding businesses, the capital investment must equal at least 20% of the value of the tangible property owned by the business. New businesses locating in urban areas require fifty (50) or more permanent, full-time employees on its payroll by the eighth calendar quarter following quarter in which the abatement becomes effective. In rural areas, the requirement is ten (10) or more. For an expansion, the business must increase employees on its payroll by 10% more than its existing employees prior to expansion, or by 25 (urban) or 6 (rural) employees, whichever is greater. In urban areas, the average hourly wage that will be paid by the business to its new employees is at least 100% of the average statewide hourly wage. in rural areas, the average hourly wage will equal or exceed the lesser of the county-wide average hourly wage or statewide average hourly wage. Note: Criteria is different depending on whether the business is in a county whose population is 100,000 or more or a city whose population is 60,000 or more (i.e., “urban” area), or if the business is in a county whose population is less than 100,000 or a city whose population is less than 60,000 (i.e., “rural” area). Section 4 - Nevada Facility Type of Facility: Headquarters Service Provider Technology Distribution / Fulfillment Back Office Operations Manufacturing Research & Development / Intellectual Property Other: PERCENT OF COMPANY'S NEVADA LOCATION MARKET OUTSIDE OF EXPECTED DATE OF NEW / EXPANDED OPERATIONS (MONTH / YEAR) NEVADA 100% October 01 2017 NAICS CODE / SIC INDUSTRY TYPE 336510 - Railroad Rolling Stock Manufacturing Manufacturing DESCRIPTION OF COMPANY'S NEVADA OPERATIONS Manufacture and Remanufacture or traction motors for the rail industry PROPOSED / ACTUAL NEVADA FACILITY ADDRESS CITY / TOWN COUNTY ZIP 820 Wigwam Parkway Henderson Clark County 89014 WHAT OTHER STATES / REGIONS / CITIES ARE BEING CONSIDERED FOR YOUR COMPANY'S RELOCATION / EXPANSION / STARTUP? Reno, Nevada; Carson City, Nevada; Salt Lake City, Utah; Flagstaff, Arizona; Cedar City, Utah;Farmington, New Mexico 1 Section 5 - Complete Forms (see additional tabs at the bottom of this sheet for each form listed below) Check the applicable box when form has been completed. 5 (A) Equipment List 5 (B) Employment Schedule 5 (C) Evaluation of Health Plan Section 6 - Real Estate & Construction (Fill in either New Operations/Startup or Expansion, not both.) New Operations / Start Up - Plans Over the Next Ten Years Expansions - Plans Over the Next 10 Years Part 1. Are you currently/planning on Part 1. Are you currently leasing space in Nevada? leasing space in Nevada? Yes If No, skip to Part 2. If Yes, continue below: If No, skip to Part 2. If Yes, continue below: What year(s)? What year(s)? 2017 -2027 How much space (sq. ft.)? How much space (sq. ft.)? 130,000 Annual lease cost at current space: Annual lease cost of space: $931,243.00 Due to expansion, will you lease additional space? Do you plan on making building tenant improvements? Yes If No, skip