[HISTORY: Adopted by the City Council of the City of Socorro 10-5-2015 by Ord. No. 15-09-08. Amendments noted where applicable.]
This chapter may be cited as the "City of Socorro Economic Development Plan Ordinance."
The Economic Development Plan Ordinance is enacted pursuant to Article IX, Section 14D, of the Constitution of the State of New Mexico and statutory authority conferred upon municipalities to allow public support of economic development (NMSA 1978, §§ 5-10-1 through 5-10-13).
The purpose of the Economic Development Plan Ordinance is to allow public support of economic development projects to foster, promote, and enhance local economic development efforts while continuing to protect against the unauthorized use of public money and other public resources. Further, the purpose of the ordinance is to allow the City to enter into one or more joint powers agreements with other local governments to plan and support regional economic development projects.
Local governments are allowed to provide direct or indirect assistance to a qualifying entity for furthering or implementing an economic development plan and projects; furthermore, local and regional governments have the authority to contribute assets to development projects. However, the imposition of a tax must be approved by the voters in referendum.
Pursuant to NMSA 1978, § 5-10-4B (2013), no more than 10% of the City's annual general fund may be spent on economic development projects.
As used in this chapter, the following terms shall have the meanings indicated:
ECONOMIC DEVELOPMENT PROJECT
The direct or indirect provision of land, buildings or other infrastructure; public works improvements essential to the location; or assistance to a qualifying entity, and includes the purchase, lease, grant, or construction, reconstruction, improvement or other acquisition or conveyance of land, buildings or other infrastructure or public works improvements essential to the location or expansion of a qualifying business; and payments for professional services contracts necessary for local or regional governments to implement a plan or project.
GOVERNING BODY
The Socorro City Council.
PROJECT PARTICIPATION AGREEMENT
An agreement between a qualifying entity and the City whereby the City provides assistance to an economic development project in exchange for the benefits received as set forth in this chapter and a substantive contribution from the qualifying entity.
QUALIFYING ENTITY
An existing or proposed corporation, limited liability company, partnership, joint venture, syndicate, association or other person that is one or combination of two or more of the following:
A. 
An industry for the manufacturing, processing or assembling of agricultural or manufactured products;
B. 
A commercial enterprise for storing, warehousing, distributing or selling products of agriculture, mining or industry, but, other than as provided in Subsection E, F, or I of this definition, not including any enterprise for sale of goods or commodities at retail or for distribution to the public of electricity, gas, water or telephone or other services commonly classified as public utilities;
C. 
A business in which all or part of the activities of the business involve the supplying of services to the general public or to governmental agencies or to a specific industry or customer, but, other than as provided in Subsection E or I of this definition, not including businesses primarily engaged in the sale of goods or commodities at retail;
D. 
An Indian nation, tribe or pueblo or a federally chartered tribal corporation;
E. 
A telecommunications sales enterprise that makes the majority of its sales to persons outside New Mexico;
F. 
A facility for the direct sales by growers of agricultural products, commonly known as farmers' markets;
G. 
A business that is the developer of a metropolitan redevelopment project;
H. 
A cultural facility; and
I. 
A retail business, defined as a business that is primarily engaged in the sale of goods or commodities at retail and that is located in a municipality with a population of 10,000 or less.
A. 
The City Clerk, after approval of the governing body by ordinance, may assist economic development projects in any legally permissible manner, including but not limited to provisions of land, buildings, and infrastructure, provided that all the requirements of this chapter are met. The City may provide land, buildings or infrastructure it already owns, or it may build, purchase or lease the facilities needed for an economic development project. The City, at its discretion, may bear the full cost or contribute a portion of the costs, including the waiver of applicable fees. The City, at its discretion, may also contribute to the payment of costs for professional service contracts such as industry feasibility studies and planning and design services needed to implement a project.
B. 
The governing body may consider offering all forms of assistance allowed under this chapter and any other legally permissible forms of assistance; however, this does not establish any obligation on the City's part to offer any specific type or level of assistance.
A. 
Any qualifying entity meeting the definition set forth in § 23-6 may propose an economic development project to the City. Meeting the definition of a "qualifying entity" does not create any obligation on the part of the City.
B. 
Applications from qualifying entities shall be submitted to the City on forms provided by the City.
C. 
Applications shall contain the following information for business applicants.
(1) 
Identification information:
(a) 
Complete name and address of entity;
(b) 
Incorporation papers with bylaws;
(c) 
List of board of directors and executive director, with addresses; and
(d) 
Resumes of all directors and officers.
(2) 
Evidence of financial solvency (personal statement of principals):
(a) 
Financial statement (income statement and balance sheets) for the past three years;
(b) 
Federal tax number, New Mexico State Taxation and Revenue number and municipal business license;
(c) 
Projected income statement for at least three years.
(3) 
Evidence of organizational capacity:
(a) 
Brief history of the entity;
(b) 
Organizational chart of the entity;
(c) 
Business plans for the entity and proposed project (shall include pro-forma cash flow analysis);
D. 
The project participation agreement and any other pertinent information will be forwarded to the governing body for final consideration at a public meeting.
A. 
Applications for economic development projects requesting economic assistance from the City which meet the policies and objectives of the City's community development plan shall receive priority. Examples include but are not limited to:
(1) 
Manufacturing firms (including intellectual property such as computer software);
(2) 
Projects, which enhance the exporting capacity of companies and/or provide goods and services, which currently have to be imported into the City of Socorro;
(3) 
Private companies seeking to build, expand or relocate facilities;
(4) 
Private companies which provide facilities or services which enhance the ability of Socorro businesses to operate;
(5) 
Organizations which assist business start-ups or bring small companies together to increase their competitive abilities. This must involve a tangible project which will create jobs and promote an industry. Examples include, but are not limited to:
(a) 
Business incubators;
(b) 
Art incubators or coalition (e.g., a performing arts coalition seeking construction rehearsal or performance facilities);
(c) 
Public markets for farmers, gardeners, crafts, etc.; and
(d) 
Organizations which foster economic development by promoting work force development efforts such as apprenticeships or other job training programs;
(6) 
Projects in industry clusters listed above are particularly encouraged, but others are eligible to apply as well. The intention is to retain flexibility in the use of incentives; and
(7) 
Qualifying entities with existing contract or projects with the municipality when this plan is adopted may propose a restructuring of their projects as an economic development project.
B. 
All applicants for economic development projects requesting economic assistance from the City shall submit a cost-benefit analysis. Preparing a cost-benefit analysis shall be the responsibility of the applicant. The City retains the right to specify a format and methodology for the cost-benefit analysis. The governing body shall review and approve the methodology used. The source and rationale for any multiplier effects shall be identified. The cost-benefit analysis shall show that the City will recoup the value of its donation within a period of 10 years. The analysis shall address, at a minimum, the following:
(1) 
The number and type of jobs to be created, both temporary construction jobs and permanent jobs (by New Mexico Department of Workforce Solutions job category);
(2) 
Pay scale of jobs;
(3) 
Determination of which jobs are expected to be filled locally and which will be filled by transfers from other facilities or recruited from outside the City of Socorro;
(4) 
Total payroll expected at start-up and after one year;
(5) 
Anticipated impact on local tax base; and
(6) 
Anticipated impact on local school systems.
C. 
All applicants for economic development projects requesting economic assistance from the City shall require the same review required of industrial revenue bond applications. This review shall focus on environmental and community impacts of proposed projects. Special attention shall be given to job training and career advancement programs and policies. Projects shall demonstrate a strong commitment to providing career opportunities for City residents. Cultural impacts of projects shall also be considered.
D. 
All applicants for economic development projects requesting economic assistance from the City shall clearly demonstrate the benefits that will accrue to the City as a result of the donation of public resources. The City has considerable flexibility in determining what is considered as adequate benefits. Benefits, such as providing components or production capabilities, which enhance a targeted industry cluster, or addressing critical deficiencies in the regional economy, may be recognized. The benefits claimed of any proposal will receive careful scrutiny. However, it is the intent of this chapter to be flexible in the evaluation of these benefits, and to recognize the qualitative as well as quantitative impact of a proposal.
E. 
All applicants for economic development projects requesting assistance from the City shall clearly demonstrate how the qualifying entity is making a substantive contribution. The contribution shall be of value and may be paid in money, in-kind services, jobs, expanded tax base, property or other thing or service of value for the expansion or improvement of the economy. The City retains flexibility in defining the "substantive contributions." The benefits identified in the previous subsections may be accepted as adequate contributions on their own, or as cash donations may be required. Assistance in providing affordable housing to its employees or the community at large may also qualify. Determination of what constitutes an acceptable contribution for a given project shall be at the discretion of the governing body.
F. 
Final acceptance of a project shall be made by the governing body at a public meeting.
A. 
All economic development projects receiving assistance from the City shall be subject to an annual performance review conducted by the City. This review shall evaluate whether the project is attaining the goals and objectives set forth in the project participation agreement. This review shall be presented to the governing body for its consideration. The governing body, at a public hearing, may terminate assistance to the economic development project by provisions set forth in the agreement which terminate the agreement and specify the disposition of all assets and obligations of the project.
B. 
The City shall retain a security interest, which shall be specific in the project participation agreement. The type of security given shall depend upon the nature of economic development project and assistance provided by the City. Types of security may include but are not limited to:
(1) 
Letter of credit in the City's name;
(2) 
Performance bond equal to the City's contribution;
(3) 
A mortgage or lien on the property or equipment;
(4) 
Pro-rated reimbursement of donation if company reduces work force or leaves the community before the term agreed to; and
(5) 
Other security agreeable to both parties.
C. 
Should a qualifying entity move, sell, lease or transfer a majority interest in the economic development project before the expiration of the project participation agreement, the City retains the right to deny any and all assignments, sales, leases or transfers of any interests in the economic development project until adequate assurances are made that the transferee, assignee or lessee is a qualifying entity and that the terms of the agreement will be satisfied by the transferee, assignee or lessee. At its discretion, the City may choose to deny said assignment, lease or transfer or may negotiate a new agreement with the new operator, or the City may reclaim the facility and enter into an agreement with the new qualifying entity.
A. 
The qualifying entity shall prepare with the City a project participation agreement. This agreement is the formal document which states the contribution and obligation of all parties in the economic development project. The agreement must state the following items:
(1) 
The economic development goals of the project;
(2) 
The contribution of the City and the qualifying entity;
(3) 
The specific measurable objectives upon which the performance review will be read;
(4) 
A schedule for project development and goal attainment;
(5) 
The security being offered for the City's investment;
(6) 
The procedures by which a project may be terminated and the City's investment recovered; and
(7) 
The time period for which the City shall retain an interest in the project.
B. 
Each project participation agreement shall be subject to review and approval by the governing body at a public hearing.
All project monies shall be kept in a separate account by the entity and the City, with such account clearly identified. These accounts shall be subject to an annual independent audit.
The City may engage in economic development projects involving one or more other government entities for projects which encompass more than one municipality or county. In such instances, the relevant governing bodies shall adopt a joint powers agreement. This agreement will establish the application criteria and the terms of all project participation agreements. Criteria established under a joint powers agreement shall be consistent with the provisions of this chapter.